Nike’s Stock Plummets 36% in H1 2026: Key Factors Revealed

Key Points

• The footwear giant reported flat revenue growth during the first half of 2026.

• Tariff-related costs eroded profit margins.

• The ongoing Iran conflict drove inflationary pressures, potentially reducing consumer spending.

Nike (NYSE: NE) has faced prolonged challenges, compounded in the first half of 2026, driving the stock downward.

Nike disclosed that its anticipated turnaround would require more time than projected; revenue remained stagnant; its CFO announced a departure, while tariff expenses severely impacted profitability.

Consequently, the stock declined by 36% over the first half of the year, as per S&P Global Market Intelligence data.

The losses were most pronounced in March and April, with a sharp drop following its third-quarter earnings report in late March.

Data sourced from YCharts

Persistent Decline in Nike’s Stock

This downward trend aligns with longstanding concerns around Nike’s performance.

While Elliott Hill, the CEO since nearly two years ago, has aimed to revitalize the brand, significant progress has yet to materialize.

In H1 2026, tariffs caused a notable drop in gross margin, which fell by 130 basis points to 40.2%, while revenue remained flat at $11.3 billion in the third quarter.

The stock fell 15.5% on April 1 after the earnings report—the worst single-day decline of the year. Investors were particularly concerned about the forecast for declining fourth-quarter revenue and the CFO’s comments suggesting margin expansion might not resume until fiscal Q2 2027 (ending November 2026).

Furthermore, Nike’s sensitivity to inflation and supply chain disruptions exacerbated during the Iran conflict worsened investor sentiment.

Image credit: Getty Images

Looking Ahead for Nike

The stock initially dropped significantly in the after-hours session following its fourth-quarter earnings release on June 30. However, it rebounded 5% the next day, suggesting possible stabilization.

Though revenue dipped by 1% in Q4, investors remain optimistic about margin growth resuming in the second quarter of the new fiscal year.

While Nike is gaining traction in the running apparel segment, broader recovery remains uncertain. Although the stock has fallen over 75% from its peak, it’s challenging to deem it undervalued at present. However, there’s potential for recovery if it achieves sustained growth in both revenue and margins.

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