As Nike Shakes Up Its C-Suite, Should You Buy, Sell, or Hold NKE Stock?

Core Viewpoint - Nike is undergoing a significant restructuring and turnaround strategy under CEO Elliott Hill, which is reflected in its stock performance and leadership changes [3][4][5][6]. Company Overview - Nike, headquartered in Beaverton, Oregon, is a leading global designer, marketer, and retailer of athletic footwear, apparel, and sports equipment, with a market cap of approximately $97.1 billion [2]. Stock Performance - Nike's stock has seen a 20.3% pullback from its 52-week high of $82.44, closing at $65.82, and has declined 16.2% over the past year and 13% year-to-date [1]. Leadership Restructuring - The company is restructuring its senior leadership team to streamline decision-making and enhance consumer connections, with key changes including the elevation of Venkatesh Alagirisamy to Chief Operating Officer [4][5]. Turnaround Strategy - Nike's "Win Now" plan aims to rebuild its wholesale business, reignite innovation, and correct past missteps in its direct-to-consumer strategy, amidst internal restructuring and external economic pressures [6][7]. Financial Performance - In Q1 FY2026, Nike reported revenue of $11.7 billion, a 1% increase year-over-year, with wholesale revenue rising 7% to $6.8 billion, while Nike Direct revenues fell 4% to $4.5 billion [9][10]. - Gross margin decreased by 320 basis points to 42.2%, leading to a 31% drop in net income to $0.7 billion and a 30% decline in earnings per share to $0.49 [11]. Geographic Performance - North America saw a 4% revenue increase, while Greater China experienced a nearly 9% decline, impacting overall results [12]. Future Outlook - Management expressed cautious optimism, expecting Q2 revenues to decline in low single digits and gross margins to decrease by 300 to 375 basis points [13]. - Analysts predict EPS to be around $1.65 for fiscal 2026, down 23.6% year-over-year, but forecast a significant recovery to $2.58 in fiscal 2027 [13]. Analyst Expectations - RBC Capital maintains an "Outperform" rating with an $85 price target, citing progress in inventory management and a stronger operational position entering 2026 [14][15]. - The consensus rating for Nike stock is "Moderate Buy," with an average price target of $82.76, indicating a potential upside of 25.5% [16].