Newsletter · · Ashutosh Agarwal

Nike Shrinks to Grow, Marc Jacobs Blames the System - Brands: Luxury, Sneakers & Apparel - Week of October 4, 2026

Brands: Luxury, Sneakers & Apparel for the week of October 4, 2026. Podcast synthesis on Nike's fiscal Q1 miss and its PACE restructuring, the bull and bear analyst calls, why the brand lost its way in sneakers and in China, Caitlin Clark's sold-out signature shoe, the On and Hoka share gains, and Marc Jacobs on leaving LVMH.

Brands: Luxury, Sneakers & Apparel

Week of October 4, 2026: Nike Shrinks to Grow, Marc Jacobs Blames the System

This week belonged to Nike. Its first-quarter results for fiscal 2027 (June to August 2026) came out after the close on Thursday, October 1, and more than two dozen podcasts picked them apart. The verdict was close to unanimous. The North American business is starting to heal, but sales are still shrinking and management now says they will keep shrinking all year. Nike is cutting costs to protect profits while it waits for new products to rescue sales.

The other standout was Marc Jacobs on The Business of Fashion, talking about leaving LVMH. His view is that luxury's slump has more to do with how the industry is run than with which designer is in charge, and it applies well beyond his own brand.

1. Nike: The Numbers, and Why the Stock Fell Anyway

What Nike reported. On Closing Bell, CNBC's Brandon Gomez gave the headline figures:

  • Revenue: $11.21 billion, against the $11.31 billion Wall Street expected. That is down about 4% from a year ago.
  • Earnings per share: $0.48, against $0.43 expected.
  • North America: $5.13 billion, a hair above the $5.11 billion expected.
  • Greater China: $1.18 billion, well short of the $1.31 billion expected. That is down 22% from a year ago.
  • Inventory: $7.8 billion. Analysts on the same show noted it was lower than a year earlier.

The podcasts didn't agree on the China decline. The Rundown and Squawk on the Street said 26%, while Closing Bell and Chit Chat Stocks said 22%. The gap may come from measuring with and without currency moves. Either way, The Rundown's Zaid Admani pointed out it was China's ninth straight quarter of decline.

The breakdown. Chit Chat Stocks went further into the detail:

  • Europe, Middle East and Africa: revenue down 5%.
  • Selling to shoppers directly (Nike's own stores and app, which the company calls "direct-to-consumer"): down 8%.
  • Selling through other retailers ("wholesale"): down just 1%.

The co-host also noted that China revenue has "been almost cut in half" from the same quarter five years ago, down about 40%. The Rundown added that Converse fell 28%, and that sportswear (Nike's fashion and lifestyle line, as opposed to its performance sports gear) was down by double digits.

The outlook is what hurt. Nike expects revenue to fall by a high single-digit percentage this fiscal year. On The Rundown, Admani noted analysts had expected a drop of about 2%, and said the new forecast points to Nike's lowest yearly sales since 2020. Chit Chat Stocks read out the profit forecast: adjusted earnings per share of $1.15 to $1.35, compared with $2.10 last year, before roughly 15 cents of restructuring costs. "So earnings per share expected to get cut in half," the host said.

On Fast Money, a guest pointed out it was the new CFO's first call and the first time Nike had ever given a full-year forecast. He suggested the CFO may have set the bar low on purpose, and said the forecast "wasn't that much worse" than what investors had privately feared. The same guest noted that gross margin (the share of each sales dollar left after paying to make the product) "was better" and North America "was better."

How the stock reacted. Nike fell about 6% right after the release. By Friday's open on Squawk on the Street it was down "a full 50 percent on the year." The Rundown had it down more than 8% on Friday morning. On Insight On Business it closed down $1.25 at $33.90. Two smaller points stood out:

  • Nike fell on results day for the ninth time in 12 quarters, according to a Bespoke chart cited on Squawk on the Street.
  • The long view. "If you bought Nike stock in 2013, congrats, you're flat," joked the host of The Morning Market Briefing. He also counted 13 analyst price-target cuts by early Friday.

2. PACE: Nike's Plan to Get Smaller

Nike paired the results with a restructuring plan called PACE. On The Exchange, CNBC laid out what it includes:

  • Supply chain changes and a reorganization of Nike's regions.
  • About $2.5 billion in savings, including job cuts starting in 2027.
  • The biggest savings won't arrive until 2029 and 2030, according to the CFO.

The Rundown added that the savings run through fiscal 2031 and come with roughly $1 billion in restructuring charges. Marketplace put it simply: Nike "said it's going to get smaller as a company."

The Exchange also described a big reset in China. Nike "will shut down much of its partner-operated digital distribution and [concentrate] sales in official flagships," trying to look more premium and more local. Management was clear this "will hurt revenue and profitability in the near term with pressure extending into early fiscal 2028."

Wall Street's first reactions, as read out on The Exchange:

  • Morgan Stanley called the profit beat "low quality."
  • Wells Fargo said "it is hard to find good news."
  • Citi said Nike is "increasingly becoming a cost-cutting story."

Admani on The Rundown put the worry most plainly: "Nike can keep cutting costs to protect their profits while their sales keep falling, but it doesn't answer the question of what Nike is going to do to bring customers back." On Marketplace, Jessica Ramirez of Consumer Collective said the same thing more gently. Her concern isn't the cost cutting. It's that executives "haven't said much about how they'll reinvest."

3. The Bull and the Bear: Two Analysts, Two Calls

The clearest way to see the debate is to put two analysts next to each other.

The bull: Jefferies' Randy Konik (Buy, $75 price target), on Closing Bell. He calls Nike "a work-in-progress type of company" with a CEO "doing the right things." His evidence:

  • North America beat expectations, and its operating profit was up from a year ago.
  • Europe's profit was "effectively flat" in a market full of discounting.
  • Inventory is lower, and spending is more disciplined "for a business that used to spend rampantly in the past."

To him that adds up to a company "reaching that bottoming process." He expects China to take "probably … the next four to six quarters" to turn. He pointed to history: Nike last stumbled around 2015, when Adidas's Ultra Boost took over running. It recovered after its 2017 analyst day, when it "recommitted to doubling down on innovation." Its next analyst day, the first in about a decade, is roughly six weeks away.

The host pushed back. Six months ago, analysts expected this year's earnings per share of about $2.24. Now the estimate is about $1.68, "so therefore, the valuation doesn't look super cheap."

The bear (or at least the patient skeptic): Sam Poser of Williams Trading, on Squawk on the Street. He downgraded Nike to Hold on Friday after more than two years at Buy. His reasoning is the most useful analysis of the week:

  • Nike's "product creation engine" has stalled. Its hit products work: "the Caitlin shoe or some of their running shoes and soccer cleats, they've done a very, very good job." "The problem is it's a much bigger business than that."
  • It lost its eyes and ears. In its cheaper core footwear, Nike "got rid of all the support." It lost the people on the ground in stores who "always provided Nike a huge amount of information." It is rehiring, but "a lot of the new people don't know the information. So … the beginning of the engine isn't working."
  • The fix will take until the Olympics. He thinks it will be hard to convince anyone sales are improving before the fourth quarter of fiscal 2028, "which is going right into the Olympics." His summary: "I think they're making the right moves, but it's certainly a bigger slog than what was anticipated."
  • Don't blame the economy. Asked whether the weak economy is the problem, Poser said "yes to the complexity, but no to the cause." "There are always brands that are doing well in every market," he said. Outside running, "there isn't enough newness in general in athletic footwear."

Morningstar sits in between. On The Morning Filter (recorded before the results), Morningstar put Nike's fair value at $94 and kept its "wide economic moat" rating, meaning it still thinks Nike has a lasting edge over rivals. But it called Nike "really … a 2028 turnaround story, not even a 2027 turnaround story." At 21 times its fiscal 2027 profit estimate, the stock is "not cheap" for a company whose sales and profit have been shrinking since 2023. Its advice: wait for proof.

The investor day in mid-November came up on almost every show as the next real test. Before the results, a BTIG analyst on Squawk on the Street predicted Nike would "ask for more time." He believes the innovation machine "is still there." He also noted that rivals aren't exactly thriving either: "I don't think there's a whole lot of new product in the market right now."

4. What Actually Went Wrong: Four Explanations From the Podcasts

Beyond the numbers, the most interesting discussion this week was about why Nike lost its way. Four explanations came up again and again.

1. Jordan lost its scarcity. On Bloomberg Intelligence, analyst Poonam Goyal said Jordan is 13% of Nike's sales, a $7 billion business. "What went wrong here is that they kind of just started flooding the marketplace with a bunch of different retro product. And the one thing about Jordan that makes it work is exclusivity, it's selection, and it's scarcity. So you need to have all three. And all of that kind of disappeared." Squawk on the Street said Nike's Dunk revenue was cut by 50% on purpose to fix the same problem. Sneaker analyst Christopher Burns told Marketplace that Nike "overproduced Air Force Ones and Dunks and fell behind on running shoe technology."

2. The push to sell direct cost Nike its place in stores. A few years ago Nike pulled back from outside retailers to sell more through its own stores and app. The hosts of The Morning Market Briefing, relaying a retail analyst, described a hidden cost of that move. Nike used to tell retailers like Dick's and Foot Locker: "you want these hot Jordans. We'll give you these hot Jordans, but you also need to buy 10 more pairs" of slower sellers. "So when they moved fully online, they totally lost that side of the business." On Chit Chat Stocks, the hosts noted that the shelf space Nike gave up at Dick's "went to Hoka and On." Wharton marketing professor Americus Reid, on Power Lunch, made the brand version of the same argument: a brand "is very difficult to live and breathe in a two-dimensional context on a digital device."

3. The store shelf got crowded. Goyal of Bloomberg Intelligence described what changed: "When you went into the store six years ago, you probably saw Nike across the store. Today … there's a section on Nike. There's a section on On. There's Hoka. There's Brooks." She doesn't think the brand itself is broken. In Bloomberg Intelligence's twice-yearly sneaker survey, Nike is still shoppers' number one brand. "We really think it's a product issue." She gave Elliott Hill credit: performance products "grew high single digits," and Nike's running business "was actually up and it continues to be gaining market share."

4. In China, Nike taught shoppers to wait for a discount. This was the sharpest new idea of the week. Jacques Roizen, co-founder of Shanghai consultancy Forza and Performance Partners and former head of Chinese operations for brands including Pandora, spoke to the BBC's World Business Report. He argued Nike's China problem is "to a large extent … self-inflicted." Nike's three biggest stores in China are online: Tmall, JD.com and WeChat. On those sites, "what you see first and foremost is promotions, discounts, and flash sales. And I'm talking essentially 365 days a year." His conclusion: "It doesn't matter how many millions of dollars you're spending on marketing. If your 3 largest touchpoints are telling consumers, I'm on sale … at some point that's all the consumer remembers." Chinese rivals Anta and Li-Ning benefit, but in his view "Nike is making the brand less appealing in China, and therefore they're making … the job of their competition easier."

On Chit Chat Stocks, the hosts offered a contrast. Crocs is growing strongly in China after hiring local marketers who adapted the product, including taller platform styles, rather than running Nike's US sports-led global campaign everywhere.

5. The Bright Spot: Caitlin Clark's Shoe

Nike's best news of the week came the same day as its results. Caitlin Clark's first signature shoe, the Caitlin One, sold out in under two hours (Closing Bell; Brew Markets). The Best One Yet had the best details:

  • Clark signed an eight-year, $28 million deal with Nike more than two years ago.
  • The shoe gets her own logo, two swooshes forming a double C, plus an 18-piece apparel line.
  • Nike launched it in China first, a week before the US.
  • The first non-Clark wearers spotted were Travis Scott and Travis and Jason Kelce. That is why the hosts argue it breaks the old "shrink it and pink it" approach to women's products (take a men's shoe, make it smaller and pink). They expect it could sell as well to men as to women.

Nike stock had been up about 3% before the results on Caitlin Clark excitement, the hosts said.

The analysts' view: welcome, but small. Konik said "the one shoe won't move the needle," but it shows "the company's not standing still." Reid on Power Lunch drew a line between "creating transactions versus developing relationships." Poser said Nike's hit products like this one are fine. The problem is everything else.

6. The Dividend, Short Sellers and "Activist" Talk

The dividend promise. On The Tom Dupree Show (October 4), the hosts said management told investors the dividend is "sacred," that it won't be cut and that the goal is to raise it. Squawk on the Street said that comes with a payout ratio of about 72%, meaning Nike pays out roughly 72 cents of every dollar of profit as dividends. Dupree's team called the pledge a trap. "You don't know what your profits are going to look like in a year or two," they said, and a dividend "has to be paid out of free cash flow" (the cash left over after running and investing in the business). Promising it makes the stock behave more like a bond. They floated a very bearish value by applying a 10-times-earnings multiple, which they said Lululemon and LVMH trade at, to the $1.25 midpoint of Nike's forecast. That gives about $12.50 a share. That is the hosts' rough math, not an analyst's model, and we haven't checked the peer multiples they used.

Short sellers. Short sellers borrow shares and sell them, betting the price will fall. Before the results, Risk and Return put Nike's short interest (the number of shares sold short) at 87 million shares. Options were pricing in an 8% move either way on results day. The hosts said this reflects bets that inflation, gas prices and job worries are squeezing shoppers.

Could an activist step in? An activist is an investor who buys a stake and pushes management for change. With Nike's value now about $50 billion, Fast Money raised the idea. Goyal on Bloomberg Intelligence was doubtful: "If an activist were to come in, what is it that they would do? … Do they clean house by restructuring? Nike's already doing that." The Exchange's host floated a different idea: if Investor Day disappoints, people will start asking "who might be their Brian Niccol," the CEO brought in to turn around Starbucks and, before that, Chipotle.

7. Who's Winning Instead: On, Hoka and a Lesson About Apparel

Nike's rivals mostly came up as the brands taking its place, with few new numbers of their own this week.

  • On. On The Morning Filter, Morningstar still prefers On to Nike. It trades at "a pretty reasonable 18 times 2027 earnings estimates" and doesn't need a turnaround, "all this company really needs to do is … continue that established growth trend." Marketplace's Jessica Ramirez said Nike is losing share to On and New Balance in the US and in China, Japan and Korea. On EMARKETER's Behind the Numbers, the panel named On's signing of Kylian Mbappé a top marketing move of the season. They noted Mbappé had been with Nike "since he was nine years old," and that, unlike Roger Federer, he joins On in his prime. But On still has no football boot to sell.
  • Hoka. On Motley Fool Hidden Gems, a host said Hoka may pass UGG this year to become the larger business inside Deckers. Morningstar noted Deckers' recent investor day was well received. Motley Fool also pointed out that On and Deckers shares are down too, "but they're growing."
  • The case against Nike making clothes. On A Book with Legs, Smead Capital's hosts argued Nike's core shoes (Air Force Ones, Air Maxes, Jordans) should earn very high returns, since shoppers buy them without much marketing and accept price increases. Instead, they said, Nike pushed into apparel against Lululemon, Adidas, Vuori and Alo, and today "it's a very low return business." Their rule: "just because you had one good idea doesn't mean you're going to have two good ideas."
  • Puma loses Kohli. On the Prime Venture Partners Podcast, Abhishek Ganguly said cricket star Virat Kohli walked away from "a very large financial outlay" from Puma to co-found the Indian footwear brand Agilitas.

The Motley Fool hosts split on Nike's future. Jason expects the stock near $50 by 2030. Lou pointed to "negative growth and a price-to-earnings multiple … that's still $23" (he meant 23 times earnings) and would have bet lower.

8. Luxury: Marc Jacobs Says the Problem Isn't the Designer

European luxury was quiet on podcasts again this week. The best item came from a designer rather than an analyst.

On The Business of Fashion Podcast (October 2), Marc Jacobs talked about leaving LVMH, which sold his brand to WHP and G3 in a deal that closed in September. He was blunt about the past decade:

  • "LVMH was not going to open stores or [put] money into this place." Even with a hit tote bag, a well-reviewed show or a beauty launch, "we couldn't go anywhere."
  • Staying "would have just been a maintenance program, which is all it's really been in the past decade plus."

Then he widened it into a critique of the whole industry and its recent swapping of designers between houses: "What I see is a bunch of non-creative people thinking that this all hangs on a creative person. And I think it's just a big mistake." He also pointed to overproduction. During the pandemic everyone talked about making less, and then "as soon as they could … let's go back to doing five collections a year … let's get one designer who oversees it all. And then let's not have those clothes be available in the shop." He hopes "growth will mean something else," because treating "size and number and quantity" as success is "repeating this old mistake."

Two other luxury notes. He singled out Chanel: "there's an energy there that doesn't exist anywhere else in the world." And he was excited about John Galliano's new work with Zara.

The market backdrop. On Fast Money, a guest noted LVMH is down more than 20% this year, with its September-quarter sales due in about two weeks. "What we hear about China, not so exciting." The strength is in North America, while "the European consumer is still slow."

9. Quick Hits

  • DSW goes upmarket. On Behind the Numbers, the panel said DSW's same-store sales fell 2.6% last quarter, but its "affordable luxury" range doubled in volume last year. It is testing a store-within-a-store called "The Edit" in four locations. The doubt is whether a self-service discount store can feel premium. They noted TJ Maxx already does something similar.
  • Dick's vs. Foot Locker. Poser on Squawk on the Street: "The Dick's business is quite good. The Foot Locker business isn't." He blamed a lack of exciting new product and "a huge change of merchants" (the buyers who choose what to stock) at Foot Locker.
  • Holiday outlook. On Fast Money, a guest expects holiday sales growth "a point or two lower" than last year's nearly 6%. Higher-income shoppers are holding up better, and lower-income shoppers "[are] surprising people with the spend that they have on goods," mostly at value retailers.
  • Stetson stretches its brand. On The Luxury Item, CEO Robert Dundon said Stetson's boots and footwear now sell 50/50 to women and men, versus about 80/20 male for its hats. More than a quarter of the business comes from Europe, and the brand has added a premium bourbon.

What Changed Since Last Week

  • Nike's tariff-refund story is over. The cost-cutting story has started. Last week the podcasts focused on a one-time tariff refund that boosted Nike's annual profit. This week it is PACE, the dividend pledge and a full-year forecast that roughly halves earnings.
  • The next date to watch moved to mid-November. Last week's question was "what will Nike say on October 1?" Now nearly every analyst is waiting for the Investor Day.
  • Luxury results season starts in about two weeks with LVMH's third-quarter sales. That should bring European luxury back to the podcasts.