Nike (NKE 0.43%) is enduring another tough year on the markets. It's down 28% thus far in 2026, and over the past five years, it has declined by 66%. It has been a colossal fall for one of the top apparel companies in the world.
It is in the midst of a turnaround, however, and has its important year-end earnings coming up, scheduled for June 30. Should you buy this beaten-down stock before then?
Image source: Getty Images.
Nike's turnaround efforts remain ongoing
It was back in September 2024 when Nike announced Elliott Hill would be taking over as CEO. With opportunities to rebuild and repair relationships with key partners, the hope was that Hill would be able to find a way to reenergize the business and get it back to growing and producing better results. Unfortunately, there hasn't been much progress with respect to growing the business in recent years.
NKE Revenue (Quarterly YoY Growth) data by YCharts
The harsh reality, I believe, is that Nike's sluggish growth isn't something a new CEO can change quickly or easily. The economics have changed. Consumers are flocking to cheaper products, making it incredibly difficult for Nike to compete, especially with tariffs impacting prices and its bottom line. If Nike were to position itself as more of a high-end luxury brand, I could see a scenario where that works and where it limits supply in order to protect margins. But to sell to the masses, it's competing against cheap online retailers, which consumers have shown that they are more than willing to buy from in order to save money.
Unless Nike announces a significant shift in strategy, I expect it'll continue to be a tough and challenging turnaround for the company, simply because the market has changed drastically over the past several years.
NYSE: NKE
Key Data Points
The stock is cheap, but I wouldn't buy the dip
The sell-off has been so severe that Nike's stock hasn't been trading at its current levels since about 2015. Its business was thriving during the pandemic when consumers had extra cash on hand, but as things have tightened up and economic conditions worsened, demand hasn't been nearly as strong. It's indicative of the high-end nature of the products the company sells and the smaller market that they may appeal to.
That's why I don't see a reason to be optimistic that Nike will do much better in its upcoming earnings report than it has in recent quarters. Taking a wait-and-see approach with the apparel stock is still the safest option for investors going forward.
