Nike ‘s difficult turnaround under CEO Elliott Hill is taking much longer than expected and testing our patience with the stock. “We are taking the underperformance very seriously,” Jim Cramer said during Monday’s Morning Meeting after expressing frustration about the Club name last week. Nike shares have dropped more than 6% year to date. We started the position in the troubled stock back in September — betting that Hill, who came out of retirement to take the helm in October 2024, could return the iconic brand to its former glory. With a cost basis of nearly $68 per share, we’re sitting on paper losses of roughly 12%. “We’re not happy with the turn” at Nike, Jim said, adding that it has now taken longer than the turnarounds at other companies like restaurant chain Chipotle under former CEO Brian Niccol, who left in September 2024 to lead fellow Club name Starbucks . Nearly 18 months in, Niccol is in the midst of a tough overhaul of the coffee giant. By comparison, Jim said Niccol’s turn at Starbucks is ahead of Nike. Wells Fargo on Monday removed Nike from its list of “top picks” and lowered its fiscal 2027 earnings per share (EPS) estimates to well below Street estimates on concerns about international growth. “While we’re liking recent reads on innovation, overall the story remains tough near term,” the analysts wrote. In addition to innovation, Nike’s inventory cleanup is coming to an end, and the company is showing positive signs on the domestic front. However, the analysts cited a long road ahead for the sportswear giant’s China business. China was largely the reason shares of the company sank 10.5% back in December after a better-than-expected fiscal 2026 second quarter. Greater China sales in fiscal Q2 declined nearly 17% year over year, deepening from a 9% decline in its fiscal 2026 first quarter. While saying China is still being pressured by steep discounts and local competition, Wells Fargo analysts did reiterate their buy-equivalent rating with a $65 price target, representing 6.6% upside to Monday’s $61 close. In previous interviews with CNBC, Nike’s CEO said he recognizes China as a huge priority and has deployed multiple strategies, including sports-themed stores, to win back business in the world’s second-largest economy. While championing Hill, Jim was steadfast that China is a critical component of Nike’s recovery. “I just wish there weren’t so many holes in the bucket, including China, which has got to be solved,” Jim said during the Club’s February Monthly Meeting last Friday. “We’re going to have to see something soon.” (Jim Cramer’s Charitable Trust is long NKE, SBUX. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing…
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