In a sign of the changing times, the S&P 100 is delisting Nike. To reiterate, the S&P 100 – not the S&P 500 – is delisting Nike, which is a reflection of the company’s poor performance on Wall Street and elsewhere. If you want to buy a share of the stock these days, it’s floundering around $38 to $40 per share, which is as low as it’s been in about 12 years. The delisting will take effect Sept. 21.
That’s a 75% drop from its peak in 2021. So, what gives?
Let’s explore the official reasons (excuses) first. Analysts say that Nike has encountered a perfect storm of stagnant sales growth, “shrinking gross margins,” and problems in China, where its shoes are manufactured and which represents a huge consumer market for the firm. But these aren’t reasons; they’re symptoms. Saying your stock is down because sales are down is like saying the reason I’m hungry is because I haven’t eaten any food.
The proper response to that is: “Duh?!”
To be sure, other poor performers that are being weeded out of the S&P 100 include Honeywell Aerospace, Simon Property Group (shopping malls), and Colgate-Palmolive. These stocks will be replaced by Dell Technologies (computers), Palo Alto Networks (cybersecurity), Arista Networks (the cloud and data centers), and Sandisk (data storage).
One look at which companies are leaving and which companies are moving into the S&P 100 is telling on a number of levels. All of the new additions are hot tech firms in hot tech spaces. All of the companies leaving the S&P 100 are mature companies in mature industries where growth is not automatically associated with the firm’s business category.
It’s amazing that Simon Property Group, which develops and operates shopping malls, stayed in the S&P 100 this long. Go to the nearest mall, and you’ll see what I mean. Parking’s not likely to be a problem. You should be able to get a spot up real close to the door. And finding a seat in the food court should not be an issue either.
As for Nike, its problems are multifaceted. From a business perspective, the company hired a bean counter and not a sports or marketing visionary to run the company. The bean counter shook up his management team and many of its long-standing partnerships and distribution channels. This provided opportunities for the company’s competitors.
Nike Is a Fashion Brand
Nike is as much a fashion brand as an athletic performance shoe company. Things go in and out of fashion every day as fickle consumers’ tastes change. For the longest time, just having that Nike swoosh logo on a shirt or a hat or your shoes was enough to signal that you’re on trend, that you buy a certain quality, and that you maintain a certain image.
This branding was reinforced by Nike’s status as the dominant sponsor of the major pro athletes in sports. From Tiger Woods to Michael Jordan, if you were a pro athlete, you weren’t “somebody” until you got that Nike shoe contract.
Tied to that, if you were big enough, you might have been featured in multimillion-dollar ad campaigns on billboards, in magazines, on TV, and more recently online. You could have expected Nike’s marketing operation to build a guerrilla marketing campaign that generated so much word-of-mouth equity that kids would be beating each other up in the neighborhood over those shoes. I’m not saying that was Nike’s goal, but what I am saying is that that’s how powerful the brand was in certain segments of society.
Nike’s corporate culture from its inception was counterculture. It broke all the rules and rewrote them. When Nike broke into the golf space, its critics predicted failure because it wasn’t a club or a ball company. So, what did Nike do? It started by using Tiger Woods to take over the apparel and shoe segments, and eventually it did become a ball company. What Nike is and always has been is a brand.
Good branding in the consumer marketplace, particularly, is very good for branding on Wall Street. It does two things: first, it knocks down any barriers associated with name recognition. Investors are consumers, too. So, when they embrace a brand as a consumer, they don’t necessarily leave that brand loyalty at home when they make investment decisions. This helps a company like Nike get on the radar of some individual and institutional investors. Second, by creating an iconic brand, you provide analysts, portfolio managers, and financial advisors cover when they recommend you take up a stake in the company. The popularity of the brand brings with it a certain “safe choice” quality when deciding which stocks to add to a portfolio.
That was then. That was before Nike saw the cumulative loss of $230 billion in market capitalization over the past 12 years. Let’s explore some of the other reasons Nike’s not the hot stock it once was.
Age
Nike founder Phil Knight is still as important to the Nike brand as Richard Branson is to Virgin Atlantic, and as the late Hugh Hefner once was to Playboy. But Knight is 88 years old now. Branson is 76, and Hefner is long gone, along with the relevance of his brand.
People get old, and if they’re personally integrated into a brand built around youth-driven disruption, the brand starts to be seen by younger demographics as an older brand. Michael Jordan is long retired. Tiger Woods will never again be the Woods who sold a lot of red golf shirts.
Marketing Channels Have Changed
Young people aren’t sitting for appointment TV anymore. Even when they watch sports, the advertising isn’t hitting in the same way as it used to. You have to do different things to appeal to the demographics Nike’s targeting, but the kind of things you can do and should do aren’t that expensive when compared to a Super Bowl ad. That levels the playing field for competitors who, in the past, couldn’t keep up with Nike’s spending in order to compete. We’re talking about digital, online, and social media marketing as well as influencer marketing, among other tactics.
Nike Is the Status Quo
As a disruptor, Nike’s brand is associated with always challenging the status quo, but at some point, no matter how outrageous the company’s designs for shoes, uniforms, and apparel try to be, Nike’s dominance has made it the “status quo.” After a while, its gaudy uniforms lost their shock value, and the company’s brand started to lose its rebel appeal.
And so, when you add all of this up, and then study the data and financials, you can better see why Nike’s revenue has dropped off from its all-time highs.
But don’t count Nike out. It’s still in the S&P 500, and that’s a good place to be. The company remains dominant in just about every market segment where it operates. It generates significant revenue and has built one of the most recognizable brands on the planet. Not only does that count for something, but it’s the kind of equity that must figure into any comeback strategy it would mount. The worst thing Nike could do at this point would be to go all Bud Light or Cracker Barrel. The worst thing the company could do at this point would be to get rid of what’s worked, along with what hasn’t worked.
BREAKING: Nike is set to be removed from the S&P 100 after nearly 18 years.
The stock is now down almost 80% from its 2021 peak, turning one of the market’s most iconic consumer brands into one of its biggest recent disappointments. pic.twitter.com/3uJNIxcg4j
— I Meme Therefore I Am 🇺🇸 (@ImMeme0) September 5, 2026
In the end, to climb back into the S&P 100, Nike would have to generate significant revenue increases, address its China manufacturing and marketing challenges, and improve profit margins. Again, “Duh?!”
To do that, however, it will have to do something all of the world’s most successful brands have had to do, and that is to reinvent itself without discarding the things that give it a fighting chance. Don’t change the logo. In fact, think about bringing some things back, like the “Just Do It” slogan with a fresh approach. The key is for Nike to get back to its roots — to shake up the marketplace. To be a disruptor once again. But don’t disrupt in such a way that you alienate half your market.
By that measure, the company should heed the advice of the brand’s number one superstar of all time, Michael Jordan, who once said, “Republicans buy sneakers, too.” Words to live by, and to build a brand around, if I may say.
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