After 18 years in the S&P 100, Nike is out. The company will be removed from the index of the largest, most stable U.S. mega-caps before the market opens on September 21. The company is still large. It is no longer stable.
From its 2021 stock-price high, Nike has fallen about 78%. It lost close to 80% of its market capitalization in five years. In the Fortune 100, it has hung on by a thread: it entered at number 91 in 2016, peaked at 83 in 2022, and barely made it in this year at number 99.
Fiscal 2026 revenue landed at $46.4 billion — still the biggest athletic brand on earth by a long shot. Adidas is second at a little more than half that. Nike’s peak revenue was just two years ago at $51.36 billion in 2024. Nike has already shed about $5 billion, or 10%, since then.
The climb took decades. The fall has been swift.
It would be easy and pat to say the company went woke and went broke. That’s true. And it is both more complicated and less complicated than that. It’s hubris. Which manifested throughout the organization.
The warning signs were visible to anyone paying attention. Gross margin for fiscal 2024 ticked up to 44.6% but only because freight costs dropped, not because the brand was stronger or had more pricing power. That freight-cost luck masked, for a moment, the decline already underway.
Nike Direct to Consumer (their own stores and website) margins were already in a downswing. An inventory glut forced heavy discounting — the classic retail doom loop.
Leadership knew it. The panic was underway.
The deeper problem was product. For decades Nike’s edge was innovation. Then it over-indexed on financial engineering, digital metrics, and recycling old franchise products — Air Force 1s and Jordans — instead of creating new performance products and running shoes. They assumed product leadership was forever, but it requires constant attention. They took their eye off the ball.
And the Hoka and On Running brands start to eat Nike’s lunch with innovation.
Nike got boring, which is the kiss of death. They thought they could milk the customer for higher-priced goods without any newness. They were wrong.
By summer 2024, the cracks produced a disastrous earnings report and a 19% single-day stock crash that wiped out $28 billion in market cap. CEO John Donahoe, the eBay guy who preferred digital optimization and “adapting” versus innovating and brand-building, was out later that year. He was always the wrong choice for the iconic brand that created an entire category and lifestyle.
For decades, every apparel company envied Nike. Product, branding, athlete dominance — no one else could touch it. That era ended in a pile of unforced errors.
Nike pulled out of mainstream wholesale — Amazon, DSW, the places regular people actually buy sneakers — to chase a higher-margin direct-to-consumer business and a customer it preferred: richer, more “progressive,” less normie. It overproduced what used to be scarce “collabs” and wrecked the scarcity that made those drops feel special.
It leaned too hard on China and watched that market grind lower quarter after quarter.
And while the cultural piece is real – “Go woke, go broke” – it is not the whole story. It is reflective of the broader issue: being out of touch with their consumer, being elitist, and thinking they (the brand) always know best. Pulling out of mainstream distribution where regular folks buy shoes – because it wasn’t cool enough – is the manifestation of being out of touch.
The taint started earlier in a decidedly un-woke fashion: they fired Olympic champion Allyson Felix because she was pregnant, then Mary Cain came forward about mental and physical abuse when she trained in the running club Nike ran called the Oregon Project. The allegations led to the coach’s firing and the club being shut down. And ultimately were a major factor in former star CEO Mark Parker’s exit. Those were not “woke.” They were the opposite, in fact.
Then Nike went all-in on leftie politics: Colin Kaepernick, COVID advertising, “trans” influencer Dylan Mulvaney as brand ambassador for running bras. Founder Phil Knight retired as chairman emeritus in 2016. Maybe that was when common sense left the building. By 2020, Michael Jordan’s old warning — “Republicans buy sneakers too” — was treated as obsolete.
The brand wanted the rich woke-sters. Everyone else could get lost. Result: a smaller, angrier customer base and a stock price in the toilet.
They are trying to walk some of it back. But sorority rush-week sponsorships in the SEC and a quieter culture war are not a strategy.
Elliott Hill, the former Nike lifer, was pulled out of retirement and took over in October 2024. A new CEO cannot wave away a decade of distribution mistakes, inventory gluts, and core-customer alienation. He is already under pressure. Fortune magazine recently asked how much time a turnaround CEO should get. Typically, they get more than two years. He may not. The market’s impatience is palpable. I can’t imagine the board’s.
This is larger than “go woke, go broke.” It is what happens when an iconic company decides the people who built it are the wrong customers and that political ideology plus a narrower vision of the business matter more than the people who actually buy the product.
Nike will always exist and will always take significant market share. My prediction: it will never again be the dominant, untouchable brand it was for nearly 40 years.
Some declines you don’t reverse. You just live with a smaller version of what you used to be.
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Jennifer Sey is the CEO of XX-XY Athletics. She is an author, filmmaker, and retired national champion gymnast.
