Down 23% This Year, Is It Finally Time to Buy Nike Stock?

Core Insights - Nike is the largest athletic apparel company globally but has faced significant challenges, with its stock down 23% this year and 67% from all-time highs [1] - The company is experiencing declining sales and gross margins, with management forecasting a mid-teens sales drop in the upcoming quarter [2] Group 1: Financial Performance - In the fiscal third quarter of 2025, Nike's sales fell 9% year-over-year, and gross margin contracted by 3.3 percentage points to 41.5% [2] - Management anticipates a sales decline in the mid-teens for the fourth quarter, with gross margin expected to narrow by four to five percentage points [2] Group 2: Market Position and Competition - Nike has been losing market share to competitors focused on performance running products, prompting a renewed focus on sports in its branding under new CEO Elliott Hill [4] - Despite a 15% sales decline in China, Nike remains the top-selling brand in that market, indicating its strong market position [7] Group 3: Strategic Changes - The company is shifting its strategy to improve wholesale channels after a previous focus on direct sales led to a 12% decline in Nike Direct sales [6] - Management is expanding wholesale partnerships to increase visibility and access to customers [6] Group 4: Investment Considerations - Nike's stock trades at a forward P/E ratio of 28, which is not considered a bargain given the current sales decline [8] - The company maintains a growing dividend yield of 2.6%, which may attract passive income investors [9]