Eighteen months into Elliott Hill’s tenure as chief executive, Nike is confronting a combination of slowing share, persistent inventory and margin pressure, and a marked increase in bearish investor activity. Euromonitor International figures show Nike’s portion of the global sports footwear market fell by 3 percentage points in 2025 to 22.9% - the third consecutive year of declines - while rival Adidas grew its share to 12.2% from 11.7% in 2024.
That competitive shift is playing out alongside a significant rise in short interest. Data from S&P Global Market Intelligence indicate that as of May 1, 4.67% of Nike’s outstanding shares were on loan, a widely used proxy for short selling. That level is more than 11 times the on-loan percentage of 0.41% recorded when Hill assumed the CEO role in October 2024. By comparison, some of the smaller rivals that have been taking share in recent years show materially lower on-loan figures - On Running at 1.68% and Deckers, proprietor of the Hoka brand, at 0.52%.
Summary of current position
- Nike’s global sports footwear market share fell to 22.9% in 2025, down 3 percentage points year-over-year.
- Adidas increased share to 12.2% in 2025 from 11.7% in 2024, and newer entrants have continued to gain traction.
- Short interest on Nike shares rose to 4.67% as of May 1, up sharply from 0.41% when Hill became CEO.
- Inventory as a share of revenue was 16.1% in the most recent quarter, and discounts remain deeper on average despite fewer items being on sale on Nike’s website compared with late 2024.
Inventory dynamics and pricing
Nike has wrestled with excess inventory after demand cooled for several of its heritage lines, including Dunk and Air Jordan, and as competitors rolled out newer styles that resonated with consumers. Management has acknowledged the need to pivot more quickly to fresh product, and a company spokesperson said Hill’s initial months were devoted to diagnosing issues, with execution of the new core-sports strategy beginning late last year. The spokesperson added that the appropriate evaluation period is the timeline since that strategy was put into action rather than a single 18-month window.
Still, retail analytics from M Science underline the pressure on margins: while fewer items appeared on sale on Nike’s direct website vs. late 2024, the average markdowns on discounted goods are deeper. The firm reported that roughly 37% of Nike products were on sale at the end of February, the latest month available for its data. Regulatory filings show inventory as a share of revenue at 16.1% in the most recent quarter, a level that is broadly unchanged from when Hill took over.
Nike has taken a multipronged approach to address the backlog, reshuffling management, intensifying brand marketing and employing targeted discounts to move through excess units. The company also noted it is removing obsolete inventory from retailers through a mix of discounts and returns - a practice that management says could affect metrics on promotional activity.
Product hits, innovation and investor reaction
Under Hill, Nike has introduced new product lines and refreshed marquee offerings. The Vomero 18 running shoe posted a rapid sales milestone, hitting $100 million in three months, and the company has plans for new iterations of its carbon-plated Alphafly running shoe and broader availability of a product called Nike Mind. Yet isolated product successes have not been sufficient to allay investor unease about the overall pace of the turnaround.
Market reaction has been stark: Nike’s shares closed at $43.09 on Monday, the lowest closing price since 2014. That decline is occurring against a backdrop of slim operating margins - reported at less than 6% in the most recent quarter - where pricing missteps and inventory inefficiencies can quickly erase profit.
Institutional investors and analysts are vocal about the mixed progress. Morningstar analyst David Swartz said: "We have been talking about the same problems since (Hill) came in, so it seems like there should have been more progress by now." Portfolio managers such as Sarah Henry of Logan Capital Management noted the company’s scale should enable a sharper competitive response: "They’re the biggest dog in the fight, so I feel like they should be able to hit everybody else pretty hard," she said, and she is waiting on signs of clearer progress before adding shares.
Other holders remain cautiously supportive but insist execution must broaden beyond isolated category wins. Simon Jaeger, a portfolio manager at Flossbach von Storch which maintains a position in Nike, observed that some moves under Hill are headed in the right direction and pointed to external cost pressures such as tariffs and energy expenses as partial headwinds. Jaeger highlighted double-digit sales growth in North American running and soccer categories as a bright spot but warned that gains need to expand across other categories to satisfy investors.
What this means for markets and stakeholders
For investors, the spike in shares on loan serves as a barometer of skepticism about the speed and probability of a meaningful recovery under current management plans. For the retail and footwear sectors, Nike’s struggles underscore how quickly market leadership can be challenged when consumer tastes shift and when emergent competitors execute effectively. For suppliers and retailers, the company’s actions to clear obsolete inventory via discounts and returns could influence wholesale channels and promotional behavior.
Management’s strategy centers on restoring pricing power and returning to consistent hit products, but the company’s economics remain sensitive to markdown depth and inventory turns. With operating margins under pressure, the window for demonstrating durable improvement will be watched closely by investors who have shown lower tolerance for prolonged operational drag in consumer-facing companies.
Conclusion
Nike’s path to regaining its previous dominance remains uncertain in the near term as market share declines, inventory levels persist and short interest has surged. Management has set a plan in motion and delivered notable product launches, but broader category momentum and sustained margin recovery will be required to rebuild investor confidence.