Nike is set to exit the S&P 100 when trading opens on September 21 as part of the quarterly rebalance by the index.
The move was announced on Friday as part of several changes to the S&P 500, S&P 100, S&P MidCap 400 and S&P SmallCap 600 indices, but also an indicator of the continued struggles at the sportswear giant, as its stock closed the day at $38.40, its lowest in 12 years.
Nike will be joined by Honeywell Aerospace, Simon Property Group and Colgate-Palmolive as companies that are exiting the S&P 100 as Dell Technologies, Palo Alto Networks, Arista Networks and Sandisk are essentially taking their places.
Still, the company will remain as part of the broader S&P 500, but the downgrade removed it from being among the most stable and influential blue-chip companies in the United States.
At its highest closing point in early November 2021, Nike’s share price reached $177.51 in a pandemic-challenged economic landscape that saw sneaker demand soar. Friday’s closing and overall slide represents more than $200 billion in market valuation erased in the nearly five years since its all-time high.
Nike is navigating a deep turnaround under CEO Elliott Hill that has seen broad changes internally within the brand’s executive ranks, operations and across product lines. Increased competition from rivals has upped the pressure to restabilize in key markets like China where the sportswear maker has seen eight straight quarterly declines and a 30 percent dip in revenue.
The company’s response in the region will be drastic and in January 2027, more than 1,000 online distributors in China will be removed from Nike’s supply chain and sales will be directed through its website, app and approved retailers Tmall, JD.com and Douyin.
That measure is expected to better manage the flow of goods in a distributor network where different outlets post conflicting prices, have misaligned branding and there are discount products without Nike’s input.
“These new flagships will serve as the single, elevated destination for Nike within these ecosystems, with clearer product presentation, stronger storytelling and more connected consumer journeys,” Cathy Sparks, Nike’s vice president and general manager of Greater China said in a letter to the company in July. “This is about strengthening the platforms where consumers already begin and end their shopping journey, making sure those experiences are direct, consistent and unmistakably Nike.”
Meanwhile, the uphill task the company faces remains understandably challenging and goes far beyond the symbolic implications of being ushered out of the S&P 100 — and how the public will perceive the news later in the month.
In the company’s fourth quarter earnings report in June, Hill was upfront about where Nike must push toward next and was mindful that a wider revamp is an uncertain goal that hopefully lives in a not-so-distant period.
“While we continue to face top-line headwinds, we’re encouraged by progress in performance product and are focused on consistent execution, improved profitability and scaling our wins to realize our full potential,” Hill said at the time in the report.
