Nike makes changes but still faces thorny challenges, analysts warn

Nike, the sports leader, has been facing a crisis in the financial markets. Its share price has been stagnant, remaining at the same levels as in 2015.

In an attempt to reverse this trend, the sports brand, which leads the sports sector worldwide, has already announced several changes. Among them, the change of CEO to Eliott Hill, cuts in its technology division as confirmed in May by Reuters , and the announcement that the brand would start selling directly on Amazon in the North American market for the first time since 2019. In May, Nike, according to Forbes , also announced several changes in several positions within the company. Amy Montagne, who was responsible for the brand's women's section, became the new president of Nike, replacing Heidi O'Neill (who retired). Phil McCartney becomes the head of innovation, design and product, overseeing product development for the Nike, Jordan and Converse brands, moving from the vice president of the footwear sector.

Nicole Graham will become executive vice president and chief marketing officer with oversight of Nike, transitioning from chief marketing officer. She will also be responsible for improving the brand's storytelling.

Tom Clark, who has been with the company for 45 years, will be responsible for the company's growth initiatives. It is worth mentioning that Tom Clark previously held the position of strategic advisor to the CEO.

All of these will report directly to Eliott Hill.

Will this be enough to convince investors/financial markets that Nike is on the right track, reversing the direction the company's shares have been taking?

According to analysts consulted by Jornal Económico (JE), Nike's path towards a brighter future is still thorny, although there are some signs of hope.

For the head of trading at Banco Carregosa, João Queiroz, the cuts in the technology division and the changes in management can be interpreted as “efforts to correct the direction to optimize costs and align the organizational structure” with the “ Win ​​Now ” vision, while commercialization in “ marketplaces ” such as Amazon “can help to dispose of inventory and increase digital reach”, these are “mainly tactical measures to manage short and medium-term challenges”.

For João Queiroz, in the medium to long term (fiscal year 2026 onwards), Nike “may benefit” from these structural changes through the revitalization of distribution channels (especially wholesale ), the launch of innovative products and strategic partnerships (such as NikeSKIMS ).

“Until then, investors will probably maintain a cautious stance, waiting for clear signs of sustained recovery in sales and margins, when their logistics are highly dependent on third countries and tariff pressure is significant”, considers João Queiroz.

Banco Carregosa’s head of trading recalls that investors and financial markets “tend to be guided” by results and growth projections.

“Nike faces substantial sales, margin and inventory challenges that will take time to resolve. Reversing the stock’s trajectory will depend more on demonstrating tangible progress in reducing inventory, returning to revenue growth (especially with innovative products), improving margins and stabilizing or growing key markets such as China,” said João Queiroz.

For the head of trading at Banco Carregosa, the measures announced constitute a step, but “they are not the definitive solution” that will, in itself, “ convince ” the markets of an immediate and sustained turnaround. “Confidence will be built as the financial results begin to reflect the success of the “ Win ​​Now ” strategy and the overcoming of economic and commercial adversities”, highlights João Queiroz.

XTB analyst Vítor Madeira believes that Nike's performance has been "disappointing", also presenting "persistent operational difficulties", recalling that in terms of financial markets the brand has experienced a "sharp devaluation" which puts it practically at 2015 price levels. This means, reinforces the brokerage analyst, that since its peak in 2021, the accumulated devaluation exceeds 60%, reflecting a "significant drop" in investor confidence.

“From a fundamental point of view, the company faces multiple challenges. Profits have been falling consecutively and sustainably, while revenues remain stagnant in a context of high inflation — a particularly adverse environment for companies in the retail sector, as it limits the ability to pass on costs to consumers and puts pressure on operating margins,” says Vítor Madeira.

Taking this context into account, explains the XTB analyst, the efforts that the sports brand has made through internal restructuring processes, with changes in leadership positions, review of development programs and adjustments to the customer relationship strategy.

But these changes have not yet had an impact, at least in terms of performance in the financial markets.

“However, to date, there are no clear signs that these measures are producing tangible results, either in terms of improving fundamental indicators or in their stock market price. Technical analysis confirms the long-term downward trend, with no consistent indications of a reversal”, highlights Vítor Madeira.

“In order to consider a positive structural change, the company will need to demonstrate, in a sustained manner, a recovery in results and, above all, to once again capture the interest of the market and institutional investors”, says the XTB analyst.

Vítor Madeira believes that this scenario is further aggravated due to the “rise” of smaller competitors, such as Amer Sports and On Holding, which have shown “solid operational performances and significant valuations” on the stock exchange.

“These new players are gaining market share in an increasingly competitive sector, challenging Nike’s historic dominance,” highlights Vítor Madeira.

But Nike faces even more challenges, according to the analyst.

“Finally, the geopolitical risk associated with the trade war and the imposition of tariffs on imports, particularly from Asia, represents an additional threat. The increase in production costs could further compress the company’s margins, hindering its ability to recover and reposition itself competitively,” explains the XTB analyst.

Vítor Madeira reinforces that Nike's current scenario “remains fragile”, both from a fundamental and technical point of view.

“The recovery will depend on the effectiveness of the internal measures in place and the company’s ability to respond to an increasingly demanding macroeconomic and sectoral context”, says the XTB analyst.

Maxyield president Carlos Rodrigues believes that the change of CEO at Nike, to Elliott Hill, caused “clouds to appear on the horizon”.

Carlos Rodrigues says that the reversal of the decline that Nike has suffered on the stock market, the recovery of its commercial position and the restoration of investor confidence, were conceived through a “business repositioning and realignment of priorities”.

The president of Maxyield highlights the new strategy that the brand has in terms of its operations and in the commercial field, in addition to the changes in its corporate management, and the abandonment of the focus on a direct-to-consumer sales model to resume the sale of products, through Amazon, from which the brand had moved away in 2019. For Carlos Rodrigues, these changes led to Nike's structural costs “being reduced, activities were outsourced and a new organizational model was designed”.

“The top of the organizational structure and management team were changed based on a more agile and flexible model. This new format is based on business economics recipes that have historically been successful in the turnaround context of several companies in difficulty”, highlights Carlos Rodrigues.

“However, in Nike’s case, it is also seeking a return to its sporting roots of growth, after a strong focus on fashion and lifestyle products, as well as the resumption of partnerships with retailers, recovering old protagonists and values ​​of the organizational culture”, reinforces the president of Maxyield.

For Carlos Rodrigues, the combination of these two aspects “boosts” the effort to restore the confidence of investors and financial markets, “reversing the direction that shares have followed, despite the current risks and contextual constraints”.