Nike stock soars 16% as the CEO says its big turnaround 'can only go up from here'

Nike stock surged as much as 16% on Friday, capping off the sportswear giant’s best trading day in years, after CEO Elliott Hill reassured investors that the company’s turnaround strategy is finally starting to show results.

On Thursday’s upbeat earnings call, Hill – who returned from retirement last October to steer the brand out of a prolonged slump – told analysts it’s “time to turn the page” as Nike works to reverse a yearlong sales decline.

“From here, we expect our business results to improve,” Hill said.

The stock rally comes despite Nike reporting its worst sales drop in five years, with revenue last quarter falling 12% to $11.1 billion. But that beat Wall Street’s estimate for an even steeper decline, and Nike forecast a smaller-than-expected, mid-single-digit sales drop for the current quarter.

Investors see early signs of recovery

The market cheered Hill’s plan, marking a dramatic reversal after Nike shares lost a third of their value over the past 12 months. Analysts said Hill’s laser focus on sports performance products – as opposed to lifestyle categories like Air Force 1s and Dunks – is resonating with consumers and investors alike.

One bright spot: the launch of Nike’s new Vomero 18 running shoes, which helped return its running category to growth. At the same time, Hill is mending relationships with retailers after Nike’s previous direct-to-consumer strategy alienated wholesale partners. As part of that shift, Nike has returned to selling on Amazon for the first time in six years, with a branded storefront featuring running, training, basketball, and sportswear lines.

Tariffs, inventory, and a delayed Skims launch

Hill’s efforts come as Nike grapples with tariffs that could add $1 billion to costs. The company plans “surgical” price increases to offset the impact and is reducing the share of footwear imports from China – currently 16% – to the high-single-digit range by fiscal year-end.

Meanwhile, Nike’s inventory cleanup is progressing, chief financial officer Matt Friend said, with stock down 0.4% last quarter as the company discounts older items to make room for new products. The delay in launching Nike’s collaboration with Kim Kardashian’s Skims brand due to production issues, analysts noted, underscores Hill’s renewed prioritization of sports over celebrity-driven lifestyle partnerships.

Analysts upgrade as confidence returns

The rally triggered a flurry of upgrades on Friday, with at least 11 brokerages raising their price targets and HSBC upgrading Nike stock to “buy” from “hold.” 

Shares of rivals Adidas, Puma, and JD Sports rose between 3% and 7% in sympathy with Nike, while On Running and Deckers Outdoors also posted gains.

Nike’s next test will be maintaining momentum as it battles rising tariffs, weak discretionary spending, and intense competition. But for now, investors appear to agree with Hill’s assertion that, after a brutal year, there’s only one direction left to go.

“It can only go up from here.”