recent example of Nike’s renewed focus on associating itself with big sport events, and with athletes who are, like Kipyegon, winners. So much did Nike want to own the moment – Kipyegon ran one second faster than her world record – that CEO Elliott Hill declared that he was “proud of Faith, our teams, and everyone who supported her” as though she were one of Nike’s own employees.  The US-based company has gone in equally hard in recent months to harness itself to other big events on the sport calendar, including the French Open tennis tournament and the UEFA Champions League final between PSG and Inter Milan, in which star players on both sides wore its marquee boots. (As did players on both sides for Adidas, one of its major competitors.) It’s a connection with sport stars and mega-events, along with a revamp of its product range and continued winnowing down of bloated inventories, that Nike hopes will turn the company around. Clear the decks On the same day that Kipyegon was flying down the track at Stade Charléty in Paris, CEO Hill and CFO Matt Friend were reporting on Nike’s results for the final quarter of its 2025 fiscal year, ending May 31. The results were again subpar, but the leadership hopes that they have laid the foundation for making Nike a clear global leader again in the sportswear category. During the quarter, Nike’s overall global revenues fell by 12 per cent, year-on-year, to US$11.1 billion. Gross margin, at 44.3 per cent, fell by a whopping 440 basis points as the company cleared the decks of its surplus inventory, particularly in the wholesale channel.  Despite the clean-up, stock levels are still too high, and Friend told investors on the earnings call that the company expected it would take another six months before it was in a “healthy and clean position” regarding inventories. Selling and administrative expense as a percentage of sales was up sharply for the quarter, thanks partly to what the company calls ‘demand creation’, and net income declined by 86 per cent, to US$211 million.  For the whole fiscal year, the story was similar: Revenues were down 10 per cent on fiscal 2024, to US$46.3 billion and net income fell by 44 per cent, to US$3.2 billion. The company couldn’t point to a particular region that outshone the others; weakness is evident in all its geographic regions. Revenues for the May quarter fell by 11 per cent in North America (down 8 per cent for the year as a whole), 9 per cent in Europe, Middle East and Africa (10 per cent for the year), 21 per cent in Greater China (13 per cent for the year), and 8 per cent in Asia, Pacific and Latin America (7 per cent for the year).  Is Nike now ready to go on offence? When Hill took over from John Donohoe as CEO at Nike last October, he knew it was going to be a big ask to make Nike a winner again. This was belied by his confident rhetoric, but after nine months of diligently removing the baggage left by his predecessor, Hill has arrived at a critical juncture in his tenure, when his ‘sport offense’ strategy needs to be transformed from a marketing slogan to actual market leadership. Competition in the company’s key growth markets is intense, and it is becoming ever more difficult for Nike to navigate through the congested marketplace and stand out as innovation leader like it once did. Indeed, being an American brand, it isn’t exactly flavour of the month right now in places like China. China is also less far along than other parts of the world in terms of clearing surplus inventory. Also regarding China, tariffs on merchandise produced there and imported into the US are another challenge the company is having to address. Currently, Nike is reducing its exposure to Chinese manufacturing from its current level of 16 per cent of US imports to under 10 per cent by the end of next year, as it re-allocates its sourcing to other countries. Even so, under current tariff rates, the company estimates that the gross cost to Nike will be a cool US$1 billion, and some of that will be passed on to consumers. Is the worst now over? Friend was not wrong when he said earlier in the year that things would get worse before they get better. When you are a global company with 40,000 points of distribution and multiple channels flung across 190 countries, a turnaround story is bound to take a long time. Thus, the tenor of remarks during the company’s earnings call was one of urgency: clean up inventories, get wholesale channel and manufacturing partners on board with sharing costs, reset the product line, go full-on with targeting elite sporting events and, eventually, restore premium pricing and market positioning. Hill told investors on June 26 that “no other brand dreams as big as we can”, but his audience was in the business of cash returns, not dreams. Still, they bought into the recovery story hung out by Hill and Friend, along with indications that revenue and profit shortfalls in the current quarter would be narrower than earlier feared; the company’s stock price rose about 15 per cent on June 27, reducing the year-to-date loss to under 5 per cent. On the same day, some degree of certainty was introduced into the tariff situation, with US President Trump announcing that the temporary truce in tariff escalation with China had now been cemented in a new trade agreement.