Elliott Hill, a longtime Nike executive, came out of retirement last year to take the helm of the footwear giant. So far, his turnaround plan is showing progress—at least in most markets. Even as the company posts 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 sales reached $12.4 billion for the September-November period, up 1 percent year over year, though net income fell 32 percent to $800 million.
Still, Nike’s stock sank more than 10 percent on Dec. 19 as investors zeroed in on persistent weakness in China. Sales in the region dropped 17 percent to $1.4 billion, marking the sixth consecutive quarter of declining revenue there.
“We see China as a big opportunity,” said Hill during Nike’s earnings call yesterday (Dec. 18). “With that said, it’s clear that we need to reset our approach.”
Nike’s once-dominant sneaker business has stumbled in recent years amid an overreliance on lifestyle franchises. The company needed new leadership to regain momentum in specialized 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 Hill has dubbed “Win Now,” Nike has reshuffled leadership roles to streamline operations and reduce management layers. The strategy centers on reclaiming authority in sports performance by emphasizing products designed for running, basketball and football, while pulling back from oversaturated lifestyle staples such as the Air Force 1 and Dunk.
The approach is already delivering gains, particularly in North America, where sales jumped 9 percent in the most recent quarter to $5.6 billion. “I’d say we’re in the middle innings of our comeback,” said Hill.
China, however, remains a major obstacle. Efforts to roll out “Win Now” initiatives in key cities like Beijing and China—ranging from upgraded in-store presentations to stronger product storytelling—have struggled amid declining foot traffic and elevated levels of aging inventory. “What we’ve done is a start, but it’s not happening at the level or the pace we need to drive wider change,” said Hill.
Looking ahead, Nike plans to tailor its strategy to China’s increasingly digital-first retail environment. As the company ramps up investment in the region, executives also stressed the need to improve store fleets within China’s “monobrand footprint,” where single-brand stores dominate over third-party retailers.
At the same time, Nike is balancing market-specific challenges with the effects of tariffs. The company, which manufactures much of its footwear and apparel in Vietnam, Indonesia, Cambodia and China, has also been forced to absorb costs and raise prices due to levies on imports. Nike is facing a $1.5 billion tariff hit for the year in what Hill described as a “significant headwind.”
