NIKE(US:NKE) The Motley Fool·2025-12-26 09:25Core Insights - Nike's stock has significantly declined, losing approximately 65% of its value since the beginning of 2022, raising concerns among investors about its future performance [2][12] - The company is currently undergoing a turnaround strategy, focusing on its core strengths and aiming to improve margins and sales [12][17] Financial Performance - Nike's stock fell 29.8% in 2022, 7.2% in 2023, and 30.3% in 2024, with a year-to-date decline of 22.4% [1] - The current market capitalization of Nike is $89 billion, with a gross margin of 41.98% and a dividend yield of 2.68% [9] Strategic Direction - Nike's "Win Now" strategy emphasizes a return to its strengths in sports categories like running, football, and basketball, while reducing costs and revamping its product portfolio [12] - The company is facing challenges with its direct-to-consumer (DTC) business, which has struggled to resonate with cost-conscious consumers, leading to price cuts and margin compression [8][12] Investor Sentiment - Investor confidence in Nike has waned, shifting the perception of the company from a growth stock to one focused on turnaround potential [9][12] - Despite recent struggles, there is a belief that Nike could be a contrarian buy for long-term investors, especially given its established brand and potential for recovery [2][17] Market Context - The broader market context shows the S&P 500 hovering around all-time highs, contrasting with Nike's declining stock performance [1] - The upcoming holiday season is critical for Nike, as management expects slight revenue declines, which could further impact investor sentiment [16]