Nike has already been deliberately cautious. In June, management said the turnaround was taking longer than expected and projected another revenue decline through the first half of fiscal 2027.
At Nike’s 2026 Annual Shareholders Meeting on September 8, 2026, CEO Elliott Hill directly addressed investors who were focused on the near-term stock/quarterly results. He said:
“We’re not managing this company quarter-to-quarter. We are building it for the next decade.”
Here’s the thing about that. Eventually, too much talk about Nike struggling, Nike being a “has been”, $200 billion in market cap washed out, “no one wears Nike” etc etc… it could end up hurting the brand and sales. It also might affect employees and their work ethic. Think of a sports team. If you keep losing it’s much harder to turn things around and if all that surrounds you in public is negativity it becomes increasingly harder.
Lululemon explicitly said on its Q2 FY2026 earnings call that negative commentary in media and social channels hurt traffic, which contributed to its moderating sales trend. Management said this affected both North America and China.
So, Nike management has something to think about- should it continue to be cautious with guidance or is it time to risk taking a too optimistic stance? On Running released 2029 Financial Targets a few days ago and the stock jumped 13 %. It created a short term bump but it makes a long term bullish trend for the stock harder. With hindsight, Lululemon's guidance appears to have been too optimistic as promising too much has caused the stock to crater. Interestingly, Nike has had a more cautious approach but the stock is doing just as poorly. I guess that shows guidance doesn’t truly matter in the long term because results will catch up with reality eventually.
I think there's a meaningful possibility Nike takes a more optimistic view of the longer-term trajectory than the headline financial guidance might suggest. Nike has just lost its S&P 100 membership, effective September 21, after its prolonged share-price/market-cap decline. Bloomberg also reported that Nike's IR team circulated talkingpoints emphasizing that the company remains in the S&P 500 and that the S&P 100 changedoesn't affect its business or strategy. And the Dow situation is genuinely being discussed: Nike is currently the lowest-priced Dow component and has only about a 0.4% weight. Reuters reports that there is no mechanical rule forcing its removal, but theAverages Committee can make changes when it considers them appropriate.
I don’t think Nike’s S&P 100 membership or its Dow seat matters nearly as much as securing faith in the company among investors. But it’s becoming a turning point with all this bad news and I honestly think it could damage sales directly. You read a headline about Nike collapsing and maybe indirectly you don’t want to buy sneakers from a losing company.
Hill has been saying on and on for a hundred times that this turnaround is going to take time. Maybe it’s time to say “Listen up, everyone- we’re finally seeing big improvements. We can’t back it with numbers here but it’s enough that we are going to see ambitious sales targets for 2029.” Thus far, all Hill has said is that Running is improving. And that North America is going well.
JD Sports today reported that first half sales were poor in North America and down 6.8 % there YoY. Nike is 40 % of all JD sales. JD specifically said part of the problem was Nike’s lack of innovation. However, JD also said it’s just a matter of time before Nike’s turnaround starts working. In other words, JD has full confidence in Nike improving their products.
I feel like Nike can release terrible numbers for earnings on October 1 and it doesn’t matter as long as it is optimistic about guidance and then the stock will jump back to $40-42 range. In turn, no matter how big a beat the stock might fall to $33 if Hill plays it safe with cautious guidance. “Look guys, the turnaround is taking longer than we want it to…” = stock goes down. “We have some great news- the turnaround is working, numbers aren’t here yet but they will be” = stock goes up.