Nike is losing its edge: What went wrong for the sportswear giant?

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Nike is losing its edge

Nike leaves the elite index

On September 21, Nike will be removed from the S&P 100, an index that includes some of the largest U.S. companies. The brand had been part of it since late 2008, for almost 18 years. Nike will, however, remain in the S&P 500.

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The reason is the stock’s prolonged decline. As of September 11, Nike shares trade at around $36. They have fallen nearly 43% since the start of 2026, more than 51% over the past year and almost 78% over five years. The stock is now trading near its 2014 low.

Nike’s market capitalization has fallen to around $55 billion. For comparison, at its peak in November 2021, the company was worth about $281 billion.

Nike and three other companies will be replaced in the S&P 100 by Dell Technologies, Palo Alto Networks, Arista Networks and SanDisk. All four are technology companies. Following the rebalancing, funds that track the S&P 100 will have to sell Nike shares and buy shares of the new index members.

The bet that backfired

The problems began to build under former CEO John Donahoe, who led Nike from January 2020 to October 2024. The company focused heavily on direct sales through its own stores and website while cutting supplies to third-party retailers. Competitors quickly filled the shelf space Nike left behind.

At the same time, Nike became too dependent on a handful of popular models, particularly the Air Force 1 and Dunk. They generated strong sales for years, but the company failed to produce new hits on the same scale. During Donahoe’s tenure, Nike shares lost around 20%, while the S&P 500 gained roughly 80%.

Nike lost particularly noticeable ground in running shoes. On and Hoka, owned by Deckers Outdoor, grew rapidly in this segment. Problems have also emerged at Jordan, one of Nike’s best-known businesses, with sales of Jordan-branded products declining in 2026.

China is another weak spot. After several years of missteps, Nike began restructuring its local distribution network and cutting ties with thousands of online sellers. The move is intended to give the company greater control over sales, but it also increases the risk of further market share losses.

The veteran returns

Elliott Hill took over as CEO in October 2024 after spending more than 30 years at Nike and returning from retirement. The stock jumped 7% on news of his appointment. But since he took charge, the shares have lost around half their value, while the company’s market capitalization has fallen by more than $60 billion.

Hill has focused on the Win Now strategy. It calls for renewed emphasis on basketball and running, rebuilding relationships with major retailers and speeding up the development of new products. The company is also trying to reduce its dependence on older bestsellers and return more products to third-party store shelves.

Investors and analysts are still not convinced that Hill’s plan is working. According to Bloomberg, as of late August only 16 analysts recommended buying Nike shares. Another 24 rated the stock a hold, while four recommended selling. At least 12 brokerages have also downgraded their ratings on the stock since the beginning of 2026.

Getting back in shape will not be easy

In just a few years, Nike has gone from an undisputed leader to a company trying to win back lost ground. Distribution mistakes, dependence on aging product lines and weaker positions in running cannot be fixed by simply changing the CEO.

Elliott Hill is trying to restore Nike’s focus on sports and accelerate product development, but the market wants concrete results. If sales fail to recover and new models do not become hits, removal from the S&P 100 may prove to be far from the most painful episode in the company’s current crisis.

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