Nike (NKE +1.79%) used to be a blue chip staple, but is now a sore spot in portfolios. Shares of Nike have fallen 77% from their peak in late 2021, and are down about 44% in 2026 as of this writing. The company is mounting a turnaround, but does that mean investors should buy the stock now before earnings on Oct. 1 or remain on the bench this time around?
NYSE: NKE
Key Data Points
The athletic apparel giant's biggest challenge is China. Revenue in the country fell 12% in the last quarter as Chinese-based brands gained favor among consumers there. Nike expects this trend to continue as well.
Nike is combating this by rebuilding its wholesale relationships, reducing excess inventory, and focusing on its key sports, locations, and specific cities. The athletic retailer's balance sheet remains strong, with about $9 billion in cash and short-term investments. Nike also still pays a quarterly dividend of $0.41 per share.
Image source: The Motley Fool.
Nike's management anticipates its gross margin will reverse course and begin expanding starting in the second quarter of fiscal 2027. A turnaround won't be easy or quick, but Nike has staying power and is a globally recognized sports brand.
For long-term investors, buying now while the stock is relatively inexpensive could be a good idea if you plan to buy a small position and grow it as Nike proves to shareholders its turnaround strategy is actually working. This quarter's results are just a small example of a larger comeback effort.
Patience is a must as Nike works to find a sustainable running pace.
