Elliott Hill, a former Nike executive, came out of retirement last year to take the helm of the footwear giant. So far, its turnaround plan is showing progress, at least in most markets. Even as the company delivers solid global results, its grip on China continues to weaken.
Hill’s renewed focus on product innovation and a return to Nike’s sporting roots helped the company beat Wall Street expectations on both revenue and profit for the second quarter of fiscal 2026. Total revenue was $12.4 billion for the September-November period, up 1 percent year-over-year, although net profit fell 32 percent to $800 million.
Still, Nike shares fell more than 10 percent on Dec. 19 as investors focused on continued weakness in China. Sales in the region fell 17 percent to $1.4 billion, marking the sixth consecutive quarter of declining sales there.
“We see China as a big opportunity,” Hill said during Nike’s earnings call yesterday (Dec. 18). “That said, it is clear that we need to rethink our approach.”
Nike’s once-dominant sneaker company has stumbled in recent years due to an overreliance on lifestyle franchises. The company needed new leadership to regain momentum in specialty sports categories such as running. Hill, who spent more than three decades at Nike before retiring in 2020, was tapped for the role last October.
Nike’s ‘Win Now’ turnaround plan
Under a reorganization that Hill has called “Win Now,” Nike has reshuffled leadership roles to streamline operations and reduce layers of management. The strategy focuses on regaining authority in sports performance by emphasizing products designed for running, basketball and football, while pulling away from oversaturated lifestyle products such as the Air Force 1 and Dunk.
The approach is already paying dividends, especially in North America, where sales rose 9 percent to $5.6 billion in the most recent quarter. “I would say we’re in the middle innings of our comeback,” Hill said.
However, China remains a major obstacle. Efforts to roll out ‘Win Now’ initiatives in key cities such as Beijing and China – ranging from improved in-store presentations to stronger product stories – have struggled amid declining foot traffic and increased levels of aging inventories. “What we’ve done is a start, but it’s not happening at the level or pace we need to drive broader change,” Hill said.
Looking ahead, Nike plans to align its strategy with China’s increasingly digital retail environment. As the company ramps up investments in the region, executives also emphasized the need to improve its store fleet within China’s “monobrand footprint,” where single-brand stores dominate over third-party retailers.
At the same time, Nike balances market-specific challenges with the effects of tariffs. The company, which makes much of its shoes and clothing in Vietnam, Indonesia, Cambodia and China, has also been forced to absorb costs and raise prices due to tariffs on imports. Nike faces a $1.5 billion tariff increase this year, which Hill described as a “significant headwind.”
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