Moderately Priced or Nonetheless Too Costly?​

• Nike has been dropping market share for years, and that development is more likely to proceed.

• The attire phase was the one a part of the enterprise that meaningfully grew in its fiscal 2026 Q2, and that progress decelerated sequentially.

• Worldwide gross sales, which symbolize a good portion of complete income, proceed to drop.

• 10 shares we like higher than Nike ›

Nike (NYSE: NKE) is without doubt one of the most recognizable athletic manufacturers on the earth. The corporate has quite a few sponsorship offers with elite athletes, a protracted historical past, and a powerful product lineup. Nevertheless, these components have not been sufficient to elevate its inventory value, which is down by greater than 50% over the previous 5 years.

For buyers, one optimistic results of that poor efficiency is that on the present share value, Nike’s dividend yield is an interesting 2.5%. Nevertheless, there aren’t many shiny spots to level to past that. Primarily based on what we are able to see at this time, it seems like Nike will proceed to wrestle as its gross sales progress stays stagnant.

CEO Elliott Hill described the second quarter of fiscal 2026 as the center innings of the corporate’s comeback. Income inched up by 1% 12 months over 12 months, whereas internet earnings fell by greater than 30%.

Primarily based on these outcomes, claiming to be in the course of a comeback could also be untimely, however the earnings report wasn’t all doom and gloom. For the interval, which ended Nov. 30, wholesale income — the corporate’s largest phase — elevated by 8% 12 months over 12 months. In the meantime, Nike Direct income fell by 8%.

Tariffs and excessive prices for U.S. customers are including to the stress on Nike’s outcomes. These headwinds can lower into the features of the wholesale phase and amplify the losses of Nike Direct.

Nike’s North American income was up by 9%, however gross sales in all different areas fell. Within the European, Chinese language, and Asia Pacific & Latin American areas, revenues sank by 1%, 16%, and 4%, respectively.

Worldwide gross sales make up greater than half of Nike’s income. In the event that they proceed to say no because of tariffs, commerce wars, and rising competitors, it’ll put an additional drag on Nike’s capability to develop.

North American gross sales progress is a key motive why Nike’s executives consider that the corporate’s comeback in underway. Nevertheless, Nike is already extraordinarily well-known and established in these markets, which can restrict its potential for additional progress within the area. U.S. corporations usually flip to worldwide markets to reinvigorate their progress as soon as they’ve saturated the North American market.

One other regarding signal is that attire was Nike’s solely rising phase, and that a part of the enterprise was solely up by 4% 12 months over 12 months. Tools and footwear gross sales have been roughly flat 12 months over 12 months. Whereas gear is a small a part of the enterprise, footwear supplies greater than 60% of complete income.

So footwear gross sales should develop for Nike to stage an actual turnaround, however that is not occurring to date in fiscal 2026. The expansion fee within the attire phase has additionally decelerated. Within the first half of fiscal 2026, attire gross sales have been up by 7% 12 months over 12 months. Nevertheless, the 4% progress fee in fiscal Q2 was a significant deceleration.

Nike executives have been pouring capital investments into their turnaround efforts, however that does not imply a comeback is within the playing cards for this dividend inventory. Traders might wish to avoid Nike for now.

Before you purchase inventory in Nike, contemplate this:

The Motley Idiot Inventory Advisor analyst workforce simply recognized what they consider are the 10 finest shares for buyers to purchase now… and Nike wasn’t considered one of them. The ten shares that made the lower might produce monster returns within the coming years.

Contemplate when Netflix made this record on December 17, 2004… in case you invested $1,000 on the time of our suggestion, you’d have $482,209!* Or when Nvidia made this record on April 15, 2005… in case you invested $1,000 on the time of our suggestion, you’d have $1,133,548!*

Now, it’s price noting Inventory Advisor’s complete common return is 968% — a market-crushing outperformance in comparison with 197% for the S&P 500. Do not miss the newest high 10 record, obtainable with Inventory Advisor, and be a part of an investing group constructed by particular person buyers for particular person buyers.

See the ten shares »

*Inventory Advisor returns as of January 14, 2026.

Marc Guberti has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Nike. The Motley Idiot has a disclosure coverage.

Nike Inventory: Moderately Priced or Nonetheless Too Costly?​ was initially printed by The Motley Idiot