Elliott Hill, a longtime Nike executive, came out of retirement last year to take the reins of the footwear giant. So far, his turnaround plan is showing progress—at least in most markets. Even as the company posts strong global results, its hold in China continues to weaken.
Hill’s renewed focus on new product innovation and a return to Nike’s athletic roots helped the company beat Wall Street expectations for both revenue and profit for the second quarter of fiscal 2026. Total sales reached $12.4 billion in the September-November period, up 1 percent year-on-year, although net income fell 32 percent to $800 million.
Still, Nike stock fell more than 10 percent in Dec. 19 as investors try to tap into continued weakness in China. Sales in the region fell 17 percent to $1.4 billion, marking the sixth consecutive quarter of revenue declines there.
“We see China as a big opportunity,” Hill said during a call with Nike yesterday (Dec. 18). “Having said that, it is clear that we must reform our approach.”
Nike’s once-dominant sneaker business has stumbled in recent years amid an overreliance on lifestyle merchandising. The company needed new leadership to bring back momentum in special sports such as running. Hill, who spent more than three decades at Nike before retiring in 2020, was appointed to the role last October.
Nike’s ‘Win Now’ conversion program
Under a restructuring Hill called “Win Now,” Nike reorganized leadership roles to streamline operations and reduce management layers. The strategy focuses on reclaiming authority in sports performance by emphasizing products designed for running, basketball and soccer, while pulling back from lifestyle staples like the Air Force 1 and the Dunk.
The approach is already paying dividends, particularly in North America, where sales jumped 9 percent in the latest quarter to $5.6 billion. “I would say we are in the middle of the innings of our comeback,” said Hill.
China, however, remains a major obstacle. Efforts to implement “Win Now” programs in key cities like Beijing and China—from enhanced in-store presentation to strong brand storytelling—have struggled amid declining foot traffic and increased attrition rates. “What we’ve done is a start, but it’s not happening at the level or speed we need to develop a broader change,” said Hill.
Looking ahead, Nike plans to adapt its strategy to suit China’s increasingly digital environment. As the company ramps up investment in the region, executives have reiterated the need to develop retail vehicles within China’s “monobrand space,” where single-brand stores dominate third-party retailers.
At the same time, Nike is balancing market-specific challenges with cost implications. The company, which manufactures most of its shoes and goods in Vietnam, Indonesia, Cambodia and China, has also been forced to hold costs and raise prices due to tariffs from other countries. Nike is facing a $1.5 billion annual tax bill for what Hill described as “windfall.”