The latest disclosure from key partner Dick's Sporting Goods suggests that Nike's persistent sales slump is unlikely to end soon, even under the helm of the highly anticipated CEO Elliott Hill.

During Tuesday's earnings call, Dick's Sporting Goods Executive Chairman Ed Stack told analysts, "I think the footwear industry is in a period of digestion. We're working through inventory of classic silhouettes. Nike, Adidas, On, and HOKA are all rolling out new styles, and the whole industry is going through a reset right now." Nike's minimalist fashion sneakers, which sold steadily at Dick's Sporting Goods stores in previous years, are now rapidly losing consumer appeal. To clear sluggish inventory, Nike has resorted to significant discounting. Jefferies analyst Jonathan Matuszewski noted that rival brands have followed suit, triggering a chain reaction that has put widespread price pressure on older models.

Matuszewski wrote in a research note, "Dick's Sporting Goods is highly dependent on Nike, but has been adding other emerging brands in recent years. The current situation is quite unfavorable for this retailer." Indeed, the situation is grim: Dick's Sporting Goods reported second-quarter adjusted earnings per share of $3.53, missing the consensus estimate of $3.76. The company also sharply cut its full-year EPS guidance from a prior range of $13.27-$14.27 to $10.94-$11.94. Data shows Dick's Sporting Goods shares plunged 30.7% on Tuesday, breaking below all key moving averages, and dipped another 1% today.

This shocking earnings signal from Dick's Sporting Goods foreshadows more pressure ahead for Nike. At the end of June, Nike reported fiscal fourth-quarter revenue of $11 billion, down 1% year-over-year on a reported basis and 4% on a currency-neutral basis. While diluted EPS of $0.72 appeared to show significant improvement year-over-year, this was largely driven by a one-time benefit from tariff refunds, contributing $0.52 per share and distorting underlying performance. The company expects fiscal first-quarter revenue to decline by low-to-mid single digits and reiterated that, excluding the tariff refund benefit, EPS will be nearly flat over the next three quarters.

Evercore ISI analyst Michael Binetti noted in a research report, "There is no sign of revenue returning to positive growth in the near term. Based on consensus estimates for fiscal 2027 EPS at 22 times, there is no reason for us to further raise valuations." CEO Elliott Hill, who returned to Nike in October 2024, recently replaced the CFO, yet operational execution issues remain pervasive. As reflected in Dick's Sporting Goods' earnings, shifting consumer sneaker preferences, cautious mass-market spending, and aggressive competition from On and other rivals continue to weigh on Nike, with no signs of recovery emerging.

The weak performance has battered Nike's stock. Compared to its all-time high in 2021, Nike shares have fallen approximately 78%; within 2026 alone, the decline has reached 38%. Matuszewski commented, "The market previously assumed the sneaker industry would sustain high growth; that Dick's Sporting Goods, catering to mid-to-upper-income customers, would be insulated from industry-wide promotional discounting; and that Foot Locker would see a rapid recovery by increasing its Nike exposure. These market assumptions now all need to be revisited."