The Motley Fool·2026-01-02 20:05Core Insights - Tim Cook has confidence in Nike's turnaround potential, having invested $3 million to double his stake in the company [3][13] - Nike's recent struggles stem from previous leadership decisions that negatively impacted financial performance [5] - The new CEO, Elliott Hill, has initiated a "Win Now" strategy focusing on product innovation and brand marketing [6][7] Company Performance - Nike's second-quarter revenue increased by 1% year over year, but sales in Greater China fell by 17%, leading to a 35% decline in EBIT [8] - The company is facing challenges, including tariffs and market weakness, which are expected to pressure margins through fiscal 2026 [11] - Despite current struggles, there is optimism for a return to double-digit EBIT margins, which could boost profitability by around 50% without revenue growth [12] Investment Perspective - Cook's investment is seen as a vote of confidence in Nike's turnaround efforts, suggesting that the situation may be better than perceived by the market [13][14] - Nike's stock may appear undervalued given its potential for future earnings growth if it successfully leverages its brand and product innovation [10][14]