Nike Exited S&P 100 Amid Structural Revenue Decline
Nike loses S&P 100 status as underlying earnings fall below consensus and key markets contract sharply.
Nike Inc. was removed from the S&P 100 index effective September 21, ending an 18-year tenure. The decision reflects a roughly 80% loss in market value, wiping out approximately $200 billion in equity. While the company remains in the S&P 500, shares have declined 48.07% over the past 12 months, signaling sustained pressure on the business model.
Recent financial results mask significant underlying weakness. Q4 FY26 diluted earnings per share of $0.72 appeared strong against a $0.13 consensus, but this included a one-time $986 million tariff-recovery benefit. Adjusting for this item, underlying EPS was only $0.20. Full-year FY26 EPS fell 3% to $2.10, or $1.58 excluding the tariff gain.
Core Markets Show Significant Contraction
Revenue in Greater China dropped 17% in the fourth quarter, with digital sales in the region falling 25%. CEO Elliott Hill acknowledged the need to restore growth in the region, noting that near-term trends align with recent declines. Converse revenue fell 32% across all territories, while Nike Digital revenue decreased 12%, sliding from $21 billion in 2024 to $17.7 billion in 2026. Total FY26 revenue of $46.4 billion is significantly lower than the $51.4 billion recorded in FY24.
Guidance Indicates Continued Revenue Slippage
Management guides fiscal 2027 revenue to decline by low to mid-single digits. Analyst consensus for FY27 EPS has dropped to $1.72 from $1.84 three months ago, with seven downward revisions and no upward adjustments in the last 30 days. Morgan Stanley initiated coverage with an Underweight rating and a $31 price target, reflecting skepticism about the turnaround trajectory.
Competitors Outperform on Margin and Growth
Competitors are capturing market share with stronger fundamentals. Deckers Outdoor grew Q1 FY27 revenue 5.7% to $1.02 billion, with HOKA up 7.7% and direct-to-consumer sales up 13.0%. On Holding posted 13.5% revenue growth to $1.05 billion in Q2 FY26, with a 65.4% gross margin. In contrast, Nike’s underlying Q4 gross margin was 40.2%, a 25-point gap that highlights the competitive disadvantage in profitability.
Capital allocation remains defensive, with only $123 million in buybacks executed against an $18 billion authorization. The 4.28% dividend yield is maintained, but the lack of aggressive share repurchases suggests limited cash flow flexibility. According to GN stocks/sp500 data, the structural challenges in key regions and margin erosion continue to weigh on the stock’s valuation.
