By the Numbers...

From 2016 to 2024, Nike’s revenue steadily increased from ~$32 billion to just over $51 billion, with an average gross profit margin holding strong at 44%. Net income margins fluctuated, but remained solid—averaging between 10–12% in recent years. Despite these consistent fundamentals, the stock has fallen nearly 70% from its 2021 highs, hinting that investor sentiment is more driven by future outlook than past performance.

*Data From SEC filings

2025 Projections

Decline of 10-12% in revenue.

Details from 2025 Q3 Report Below.

• “Third quarter revenues were $11.3 billion, down 9 percent”
• “NIKE Direct revenues were $4.7 billion, down 12 percent on a reported basis and down 10 percent on a currency-neutral basis”
• “Wholesale revenues were $6.2 billion, down 7 percent” ”Gross margin decreased 330 basis points to 41.5 percent”
• "Gross margin decreased 330 basis points to 41.5 percent"

My reflection as a former reseller & why this has occurred.

2017-2022, Reselling was Booming. Especially 2020 and 2021.

Fueled by stimulus checks, supply chain disruptions, a surge in online activity, and people searching for alternative income while quarantined at home, the reselling market exploded.

I noticed a few things during this period..

During 2020 and 2021 everything flew off the shelf, it was unbelievable. Nothing I as a reseller had seen before.

2022 was slightly different. To meet demand Nike ramped up production which thinned margins for us resellers. Rather than flying off the shelf, models now began to sit on the shelves.

By 2023 the majority of sneaker releases were being sent to outlets for discounted sale. Consumers stopped rushing to buy on launch day—knowing full well the same shoes would be sitting on shelves at a markdown just a few months later.

They drove the hype into the graveyard.

People want things that other people can't get.

You might wonder—how much of Nike’s business actually comes from hype products? About 13% is driven alone by Jordan products (think Jordan 1s, 3s, 11s etc). All "hype" shoes.

This doesn’t even include things like Nike Dunks or high-profile collaborations. Let’s conservatively estimate those add another 5%. That’s nearly 20% of Nike’s business coming from hype models.

Let me say it again: people want what others don’t have.

This hurts overall sales volume more than I think Nike realized.

When you kill the hype, you don’t just lose those exclusive sales—you drag down the whole brand. You feel a whole lot better wearing basic nike clothes when the shoes are flying off the shelves. When there not? Your whole look now loses edge.

They got away from sports

Nike took its foot off the gas when it came to innovating and pushing performance in the running shoe. While they focused more on lifestyle and hype releases, brands like Hoka and On Cloud doubled down on quality, cushioning, and marketing—slowly eating up market share from Nike.

China Sales

From 2020 to 2024, Nike’s sales in Greater China showed significant fluctuations—rising 8% in 2020 and peaking in 2021 with a 24.1% increase, before declining by 9% in 2022 and 4% in 2023. Sales saw a slight recovery in 2024 with a 4% increase, reaching $7.5 billion.

These shifts mainly coincided with political tensions, including reports of forced labor involving ethnic minorities in China’s Xinjiang region. In response, Nike and H&M publicly condemned the practices, prompting backlash in China. Retailers like JD.com, often referred to as the “Amazon of China,” removed their products from shelves, and some physical stores even closed.

Competitors

In recent years, brands like HOKA, On Cloud, and Saucony have steadily gained market share by focusing on innovation, comfort, and performance. While Nike has historically dominated the athletic footwear space, these competitors have carved out strong positions—especially among runners and everyday consumers looking for premium feel and function.

Is the future bright?

One of the hardest things to do is turn around a company.

What I've seen them personally doing

• Bringing back limited releases. AKA it's cool to wear Nike again.

This is A LOT easier said than done - especially in the current economy.

And they are doing it.

There is one very large caveat - tariffs, tariffs and more tariffs.

"For fiscal 2024, factories in Vietnam, Indonesia and China manufactured approximately 50%, 27% and 18% of total NIKE Brand footwear, respectfully." - 2024 Annual Report.

The current administration have enacted tariffs through the roof. "China faces up to a 245% tariff on imports to the United States as a result of its retaliatory actions." Yes this is literally taken from the whitehouse.gov fact sheet.

The current admin has also established 46 percent on all Vietnamese products, and 32 percent on all Indonesian products. 04/17/25 (this unfortunately changes daily)

This of course is not sustainable, it's just a betting game on if these tariffs will stay or how Nike can pivot manufacturing.