NIKE (NYSE:NKE) recently announced an update to its ongoing share buyback program, having repurchased 6.5 million shares at a cost of $499 million, reinforcing its commitment to shareholder value. Despite this positive signal, the company's stock price remained flat last week, moving just 1% amid a complex backdrop. The broader market showed signs of resilience with the S&P 500 on track to break a four-week losing streak, but Nike faced specific challenges, with news of potential sales impacts from its turnaround plan and tariff concerns contributing to the cautious investor sentiment surrounding the stock.

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The past five years have seen NIKE's total shareholder return fall by 9.50%. A notable challenge during this period has been inventory management issues impacting gross margins and contributing to revenue pressure. Another factor influencing long-term performance is the company's attempt to transition to a full-price model, aiming to improve gross margins by reducing reliance on promotions and markdowns.

Despite a strategic refocus on sports partnerships with the NBA and NFL to drive demand, execution challenges, such as missteps in digital engagement, have affected brand perception and sales margins. These challenges were compounded by underperformance compared to the broader US market, with NIKE lagging behind, particularly in regions like Greater China. Additionally, while NIKE has maintained regular dividends, as seen with a US$0.40 declaration in February 2025, the company's overall performance has not kept pace with industry counterparts, as shown by its negative earnings growth over the past year.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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