Nike to lose S&P 100 place as stock sinks to 12-year low: what’s ailing NKE?

Nike is set to lose its place in the S&P 100 after nearly 18 years, highlighting the extent of the sportswear giant’s decline as a prolonged growth slowdown and intensifying competition weigh on its market value.

S&P Dow Jones Indices will remove Nike from the index effective September 21 as part of its quarterly rebalancing.

Honeywell Aerospace, Simon Property Group and Colgate-Palmolive will also be removed.

Dell Technologies, Palo Alto Networks, Arista Networks and SanDisk will move up from the S&P 500 to fill the four vacancies, increasing the technology sector’s representation in the S&P 100.

Nike will remain in the broader S&P 500, but its removal from the S&P 100 underscores how dramatically its market position has changed in recent years.

Nike stock has lost nearly 80% from its peak

Nike’s market capitalization now stands at roughly $57 billion after a prolonged selloff.

Shares closed at $38.40 on Friday, September 4, about 50% below their 52-week high of $76.97 and their lowest level in roughly 12 years.

The stock has fallen 39.3% this year and 48.2% over the past 12 months.

From its record closing level of $179.10 reached on November 5, 2021, Nike has lost nearly 80%, wiping out roughly $230 billion in market value.

The decline has pushed Nike from the ranks of the largest and most valuable US companies, even though it remains one of the world’s biggest sportswear brands.

The deterioration has also been reflected in the company’s financial performance.

Nike’s revenue declined from $51.2 billion in fiscal 2023 to $46.4 billion in fiscal 2026, while its operating margin fell from 15.6% in fiscal 2021 to 8.2% in fiscal 2026.

Earnings beat fails to ease Nike’s growth concerns

Nike’s most recent quarterly results offered some signs of resilience, but the company’s outlook continued to weigh on investor sentiment.

The company reported fiscal fourth-quarter adjusted earnings of 20 cents per share, excluding a 52-cent benefit related to the expected recovery of import tariffs.

Revenue fell 1.1% year over year to $11 billion.

Both figures came in slightly ahead of Wall Street expectations.

Analysts surveyed by LSEG had expected earnings of 13 cents per share on revenue of $10.9 billion.

However, investors focused more heavily on what comes next.

Nike expects sales to continue declining through the first half of fiscal 2027 as it contends with tariff pressures, geopolitical uncertainty and cautious consumer spending.

The company now expects revenue to decline by low- to mid-single digits between March and November, compared with its previous forecast for a low-single-digit decline.

Earnings are also expected to remain broadly flat over the same period.

The revised outlook has made it difficult for investors to determine when Nike’s prolonged downturn might finally bottom out.

China remains a major problem for Nike

One of the biggest challenges is Nike’s performance in China, where the company has struggled to maintain its previous momentum.

Nike’s business in the country has declined for eight consecutive quarters, while its overall China operation has contracted by roughly 30% since 2021.

Annual revenue in the market reached an eight-year low at the end of May, marking a sharp reversal for a region that was once one of Nike’s most important growth engines.

The weakness has coincided with stronger competition from brands such as On, Hoka and New Balance, particularly in performance footwear.

Nike has also struggled to reignite growth in its footwear business, while weakness in its direct-to-consumer operations has added another challenge.

The combination has left the company attempting to rebuild demand while protecting profitability at a time when consumers remain selective.

CEO Elliott Hill bets on a turnaround

CEO Elliott Hill has said Nike is focused on rebuilding the foundations of the business through product innovation, brand strength, marketplace execution and cost efficiency.

The company’s ability to execute that turnaround will be crucial as investors look for evidence that the years-long decline can be reversed.

Nike remains profitable and continues to generate substantial cash, despite the pressure on revenue and margins.

It returned about $2.5 billion to shareholders in fiscal 2026, including $2.4 billion in dividends and $123 million in share buybacks.

However, the S&P 100 removal serves as a reminder that Nike’s scale alone is no longer enough to shield it from changing market dynamics.

The company now faces the challenge of proving that its brand can once again translate into sustained growth, particularly in performance footwear and China.

For investors, the sharp decline in Nike’s valuation could eventually create an opportunity if Hill’s turnaround strategy succeeds.

But with revenue still falling, margins under pressure and management expecting further declines ahead, the company has yet to demonstrate that its recovery has reached a decisive turning point.