Nike Is Down 77% From Its Peak. Should You Buy Before It Reports Earnings on Oct. 1?
2026-09-27 19:15
•Catie Hogan •The Motley Fool
••••• • Axe Cap view
Nike's Sharp Drop: Should SA Investors Care?
Nike's steep 77% fall highlights challenges in China, but what does it mean for JSE investors?
Nike’s tumble, primarily driven by a 12% sales drop in China, is a cautionary tale for investors focused on consumer discretionary stocks exposed to emerging markets. The sportswear giant is working on fixing supply chain issues and restoring retailer ties, yet these changes take time. For South African investors, direct exposure is limited, but the rand’s reaction to USD strength and emerging market risk could ripple through local retailers and banks sensitive to import costs and consumer sentiment. Prosus, with its global internet investments, may face similar exposure risks albeit indirectly. The USD/ZAR remains a key monitor—any rand weakness could squeeze margins for import-heavy companies like Woolworths or MTN. Investors should watch earnings for confirmation Nike’s turnaround is viable before jumping in. If the Chinese recovery stalls or global consumer spending weakens, the downside could deepen. this is just our opinion and not financial advice
Hold off on buying Nike-linked counters or consumer retailers sensitive to imports until Nike’s next earnings show progress. Consider hedging USD/ZAR exposure if rand volatility spikes. Stay selective in consumer stocks like Woolworths and MTN for now.
- USD/ZAR
- Woolworths
- MTN
- Prolonged slowdown in China reducing global consumer demand
- Rand weakening on sustained USD strength and emerging market pressure
6/10
Nike shares have plummeted 77% from their 2021 peak and are down 44% in 2026, primarily due to a 12% revenue decline in China as local brands gain market share. The company is executing a turnaround strategy including wholesale relationship rebuilding and inventory reduction. With a strong balance sheet ($9B in cash) and continued dividend payments, long-term investors may consider small positions while the stock is undervalued, though patience will be required as the recovery unfolds.
Our take is based on reporting first published by The Motley Fool.