Nike is pushing forward with an aggressive strategy to restore growth as the sportswear giant grapples with declining revenues and stiffening competition.
Despite retaining its position as the top sportswear brand in the U.S., Nike reported a 9% drop in total revenue for its most recent quarter, and a 15% slide in digital sales, underscoring challenges in both the market and consumer behavior.
CEO Elliott Hill, who took the helm in October, expressed confidence during an earnings call, stating, “Despite global economic uncertainty, our priority actions will continue to drive progress.”
The company has implemented a series of strategic changes to revive its fortunes, focusing on cutting costs and reshaping its sales approach.
Among the most significant shifts is Nike’s decision to eliminate discount-driven promotions, especially within its U.S. digital sales channels.
This move, which began in February, saw the company remove over 30 promotional days, aiming to push a full-price business model that Nike hopes will improve profitability.
While this has reshaped its approach, it has also faced pushback from consumers, as sales slowed during January and February.
The company is not only revamping its sales strategy but also restructuring its operations. As part of its effort to recalibrate, Nike has partnered closely with wholesale vendors to create a better balance between its wholesale and direct sales operations.
Hill noted that the first half of fiscal year 2026 would be pivotal for resetting these relationships, as Nike looks to clear inventory and refocus on premium product offerings.
While many companies would see such declines as a signal to backtrack, Nike’s approach has been resolute. In a challenging retail environment, Hill emphasized the importance of an opportunistic mindset: “We’re hustling and being opportunistic,” he said.
This commitment to repositioning the brand in the face of external pressures has driven changes that are already evident in how the company’s marketing, product lines, and partnerships are being recalibrated.
Nike’s latest moves are seen as crucial to its efforts to restore profitability and maintain its competitive edge in a rapidly changing market.
The company is doubling down on its product portfolio and brand strength, two areas it views as critical to regaining the momentum lost over the last few quarters.
However, it remains to be seen whether these aggressive moves will have the desired effect.
In the current climate, where consumer habits are evolving and brand loyalty is increasingly difficult to secure, Nike’s gamble on full-price sales and streamlining operations will need to deliver quickly.
If it fails to regain traction in the short term, the brand could face more significant hurdles as competitors inch closer.