Nike Removed from S&P 100 After Significant Market Cap Decline
Nike (NKE) has been removed from the S&P 100 index effective September 21, following an extended period of declining performance. The company's stock is down nearly 75% over five years and more than 48% in the past year, reflecting a structural decline in its business model. Nike’s Q4 FY26 earnings were inflated by one-time tariff recovery benefits, masking weaker underlying results with gross margins significantly trailing competitors like Deckers (DECK) and On Holding (ONON). Nike's revenue has been shrinking across key markets, particularly China where Greater China sales fell 17% in the last quarter. The company’s digital segment also underperformed, declining by 25% in China and 12% overall. Management acknowledged challenges in reversing these trends and guided for continued low to mid-single-digit revenue declines into FY27. Analysts have repeatedly downgraded Nike's earnings estimates without any upward revisions recently. Despite a forward P/E of 22, the stock is seen as overvalued given ongoing performance issues. Meanwhile, competitors are gaining market share with stronger growth and better margins.
Topics: earnings_analysis revenue_decline stock_index_changes