Nike's relentless decline.

Stock $NKE down 14% in a week - the worst performer in the S&P 500 and a 12-year low.

Since the 2021 peak, operating margin has more than halved. Here are the key reasons:

1. Failed DTC (Direct-to-Consumer) strategy
Former CEO John Donahoe bet heavily on direct-to-consumer sales, cutting ties with thousands of wholesale partners and retailers. The idea was that direct sales would yield higher margins. In practice, Nike vacated store shelves — and competitors filled the gap.

2. Loss of innovation leadership
Nike milked legacy franchises — Air Force 1, Dunk, Jordan 1 — for too long. This led to market saturation and brand fatigue. Meanwhile, Hoka and On Running captured the performance running segment by delivering real technological innovation.

3. Tariff hit
This is one of the most painful factors right now: roughly 50% of Nike's footwear is manufactured in Vietnam — hundreds of millions of pairs. Elevated tariffs are eating up an additional ~$1.5 billion per year.