Nike was once one of the world's strongest brands and a stock investors trusted for continuous long-term growth. It had a global business scale, a vast customer base, powerful marketing, a network of elite athletes, and the ability to shape trends. Nike shoes were not just sports gear but became part of consumers' culture and lifestyle worldwide.
But today, that image is changing...
Nike's stock price has fallen about 78% from its 2021 peak of $167.31 per share to roughly $38 per share, wiping out over $220 billion in market value—equivalent to more than 7 trillion baht—compared to its highest valuation.
Recently, Nike faced a symbolic blow when it was removed from the S&P 100 index, which tracks large U.S. blue-chip companies. S&P Dow Jones Indices announced the change would take effect before the market opens on 21 September 2026, after Nike had been in the index for nearly 18 years.
What exactly happened to the brand that once set the rules in the sports industry?
Nike's stock decline is not due to a single factor but a combination of several issues over recent years, including sales channel strategy, reliance on legacy franchises, new brand competition, the China market, and supply chain costs. Many of these problems are interconnected more than they appear.
A major turning point was Nike's accelerated push into Direct-to-Consumer (DTC) channels during the COVID-19 pandemic. Nike invested heavily in its own website, Nike app, and SNKRS platform, while reducing reliance on wholesale partners and retail stores.
This strategy made sense when consumers shifted to online shopping, allowing Nike to control customer experience, gather data, and manage pricing directly. But as the world reopened, consumer behavior shifted again; people returned to stores wanting to see and try products, especially shoes where fit, comfort, and use affect purchase decisions.
Meanwhile, relationships with major retail partners like Foot Locker, Dick’s Sporting Goods, and JD Sports were strained. Nike spent years rebuilding those retail partnerships. The issue wasn't just poor online sales but restructuring sales channels while competitors gained shelf space and built real-world consumer connections.
Shelf space Nike once dominated began to be shared with other brands.
Another key challenge was Nike's heavy dependence on successful legacy models such as Air Force 1, Dunk, Air Jordan, and various Retro shoes for too long. These franchises remain among Nike's most valuable assets and generate substantial sales, but overreliance risks becoming a constraint.
Consumers may not want to see the same old models repeatedly reissued in new colors or styles, while sneaker trends shift from traditional sneaker culture toward performance and running shoes that emphasize technology, comfort, and function. This is where new competitors have begun to change the game.
The growth of Hoka, On, Brooks, Saucony, and New Balance shows the market for athletic shoes is no longer about which brand is the most famous. The trend is moving toward running shoes and technology-driven footwear that better meet consumer needs.
Nike grew by creating brand desire—one pair of shoes could start a trend, and wearing Nike made consumers feel part of a culture. But many newer brands grow by generating product desire, truly understanding and meeting younger consumers' needs.
Simply put, people used to buy Nike because they wanted to wear Nike. Today, some consumers choose Hoka for cushioning and shock absorption, On for unique design and technology, or other brands because they better solve specific pain points. As reasons for buying change, brand strength alone may no longer suffice.
These factors have intensified Nike's competition in technology, design, brand image, and market share—especially in the running shoe segment, a vital market for Nike. The impact is now visible in market share data.
GlobalData reports Nike's global sportswear market share fell from 15.2% in 2023 to 14.1% in 2024, while Adidas, New Balance, On, and Hoka have gained share. The running shoe market, once a key Nike stronghold, has become fiercely competitive.
Nike also faces significant pressure from challenges in China, once a key growth market. The company now contends with weaker consumer spending and rising competition from strong local brands like ANTA and Li-Ning, which excel in both quality and brand image.
The "Guochao" trend, roughly translating to "national pride," reflects a growing appreciation for Chinese brands, products, and culture—especially during COVID-19—which accelerated this movement. Meanwhile, Chinese brands have steadily improved products and technology, causing Nike to lose brand preference and no longer rely solely on its global brand strength as before.
Nike also faces cost pressures as most products are manufactured overseas and affected by U.S. import tariffs, especially after the Trump administration's tariff measures implemented in 2025.
Nike has had to raise prices on some products to offset rising costs. But in a market with more consumer choices, price hikes carry risk. If consumers don't perceive enough differentiation, paying more may drive them to competitors. Thus, cost pressures not only affect Nike's margins but also its competitiveness.
Nike was nearly the perfect example of a consumer growth stock, with a global scale, strong brand, cultural popularity, large distribution network, pricing power, and international market growth.
Many investors believed Nike could deliver continued growth returns for a long time. But as the business faltered, these beliefs were challenged one by one. Growth investors had less reason to hold shares as growth slowed; momentum investors exited as the stock lost upward momentum; and quality investors reconsidered the company's competitive moat.
As sentiment changed, so did the stock price. From a 2021 peak above $167, Nike's shares have dropped nearly 80% to about $38, erasing over $220 billion in market value.
Amid accumulating problems, Nike appointed Elliott Hill, a veteran executive with over 30 years at the company, as CEO in October 2024 to lead a business turnaround. He is tackling multiple issues simultaneously, including restoring relationships with wholesale partners, refocusing on sports products, managing distribution, and driving new product launches.
However, Nike's turnaround cannot be achieved by strategy changes on paper alone. Ultimately, success depends on winning back customers, new product sales, and, importantly, stopping market share loss to competitors.
Market sentiment toward Nike has shifted continuously with business developments. Since July, signs have emerged that a recovery might be underway as Elliott Hill addresses longstanding issues.
Nike has started to rebuild retailer partnerships, refocus on sports, reduce distribution problems, and push new products to regain consumer interest. But stock prices still reflect high expectations for recovery, so investors must bet on how quickly Nike can grow again.
By August, the picture darkened again as Nike's competitive position looked more precarious: declining shoe market share, a weak China market, and rising competitors like Hoka and On. Many advantages investors once saw as Nike's barriers now seem less robust.
Being removed from the S&P 100 may carry more symbolic sentiment impact than direct business effects. Nike remains in the S&P 500 and retains status as a large U.S. company. But this event highlights how far Nike has drifted from prior investor expectations, now needing to prove if its competitive advantage can still drive growth.
This may be Nike's toughest challenge because strong brand recognition doesn't guarantee consumer purchases, nor does a large distribution network ensure sales if products fail to generate demand.
Ultimately, Nike must prove more than just stock price recovery or releasing new models. It must answer whether it can reclaim leadership in the sports world and shape the market's future. Simply following running trends, even with products like Vomero boosting sales, may keep Nike as a follower rather than a leader. Being the biggest brand may no longer suffice in a market with many options.
A true turnaround is measured not only by stock price but by consumer behavior, market share, products that genuinely create demand, and the brand's ability to set new trends.
Nike still has the resources and brand capital to come back. But no one can guarantee its ability to lead in a changed competitive landscape. Ultimately, Nike may not be fighting to return to its 2021 version but to find "Nike's next version."
Sources Yahoo Finance , Forbes
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