Nike Inc. (NYSE:NKE) CEO Elliott Hill admitted that the company’s restructuring process is not progressing as swiftly as initially planned.
Hill attributed the delay to the magnitude of Nike’s challenges, amplified by U.S. tariffs and increasing oil prices that have affected consumer spending. “What I didn’t realize until I got in is the amount of work that needed to be done and the amount of time [it would take] to get us to where we are and, more importantly, where we want to go,” Hill told in an interview with The Financial Times, published on Monday.
He stressed that the company still has “work to do," especially in terms of global consistency. Hill said the company is not yet delivering a consistent brand, product, and marketing experience worldwide. He expects revenue and profit growth to “follow” once those areas improve, with the full impact of Nike’s restructuring likely becoming evident early next year as new products roll out across markets and business segments.
"We’re not presenting consistently around the world at the level that I want. When we do that….then revenue and profits follow," Hill said.
He also highlighted Nike’s ongoing efforts to enhance operating overhead and structure for efficiency, with updates for shareholders expected at the November investor day.
Analysts See Longer Nike Recovery
Nike’s focus on higher-margin direct-to-consumer sales reduced its retail presence just as in-store shopping rebounded after the pandemic, allowing rivals like On and Hoka to gain ground. At the same time, its shift toward lifestyle products weakened its performance-driven brand image, local competitors took market share in China, and critics said its product lineup had become stale and less culturally relevant.
RBC Capital Markets analysts revised their outlook for Nike at the onset of the FIFA World Cup 2026, noting that despite some progress under Hill, the turnaround was slower than anticipated.
The analyst said Nike’s biggest hurdle is reviving consumer demand, with expected gains from Hill’s turnaround plan now pushed to 2027 rather than 2026. RBC lowered its profit forecasts for 2027 and 2028, warned of potential market-share losses, and expects Nike’s revenue growth to trail the industry’s average pace.
Previously, Needham noted that Nike expects revenue declines to persist before improving toward the end of the year, while earnings are likely to remain largely flat. Although North America posted 3% revenue growth in the third quarter, international markets continue to face headwinds, with China remaining a key concern because of elevated inventory levels.
On a positive note, Nike’s performance-focused products are gaining traction, and newer styles are resonating well with consumers.
Benzinga’s Edge Rankings place Nike Inc. in the 28th percentile for quality and the 64th percentile for value, reflecting its mixed performance. Benzinga’s screener allows you to compare NKE’s performance with its peers.
NIKE Price Action: On a year-to-date basis, Nike stock declined 29.05%, as per data from Benzinga Pro. On Thursday, it climbed 2.29% to close at $45.20.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Thrive Studios ID / Shutterstock.com
Login to comment