What’s happening: Nike reports results for its second quarter on Thursday. Three months ago, the company reported its first year-on-year growth in five quarters, with sales inching up 1 percent. This time, analysts are predicting a similarly modest gain, with margins under pressure from tariffs and discounting.
A muted reaction: Often, long-struggling brands see a bounce in their share price when they make good on promises to return to growth. Nike’s pop last quarter was small, and lasted less than a week.
That mostly comes down to scepticism that Nike has truly turned a corner after a miserable couple of years that saw the brand’s reissue-focused strategy backfire with consumers and create an opening for challengers promising more innovative — or just plain cooler — shoes.
Chief executive Elliott Hill, now over a year into his tenure, has laid out in broad strokes a vision centred on sports and innovation. Many sneakerheads and investors like what they’ve seen of this so far, and Nike still dominates many sneaker-of-the-year charts. They just want to see more before committing to the comeback narrative.
Hill people: Multiple rounds of restructuring haven’t helped the optics. Hill’s initial moves, like organising Nike’s corporate structure around sports, made intuitive sense. The latest, laying off the chief technology officer and chief commercial officer and merging their duties into other executives’ portfolios, led to some complaining of never-ending churn without a clear payoff. Those gripes will be quickly forgotten if Nike can execute on Hill’s plan.
What’s the plan: The hope is if 2024 was when Nike hit bottom, and 2025 was about setting the stage for a recovery, then 2026 is when the magic has to happen. The Winter Olympics in February and especially the World Cup next summer are the sort of global sporting events where Nike shines. The brand’s campaign for the latter kicked off in earnest at Art Basel Miami of all places, where Nike hosted the latest edition of its street football tournament, with longtime collaborator Travis Scott watching from the sidelines.
What to expect this week: Never say never, but this week’s earnings call probably won’t offer up more than a few hints and teasers about what Nike has planned for 2026. The brand is an oil tanker, much larger and more complex a business than other recent turnaround efforts like Coach or Gap, and is executing its strategy at a magisterial pace. Modest growth and demonstrating the company has a handle on the tariff situation will help buy it more time. Still, there are only so many more quarters during which investors and Nike fans can be strung along before they start demanding results.