Why this year's World Cup is happening at the perfect time for struggling Nike

CNBC Finance

9 min read

Nike 's recovering business needs a spark. This year's World Cup â hosted by the U.S., Canada, and Mexico â could be the match. "Football [soccer] allows us to invite more people in places of the world where we probably cannot reach with other sports," Camilo Andrade, head of football at Nike, told CNBC in an interview. Remember, soccer is called football in most countries outside of America. "That's why football is an accelerator of Nike sport-led offense. It's an accelerator also of who we are," Andrade added. Oregon-based Nike made its first major push onto the global soccer scene during the 1994 men's World Cup, the last time it was held in the United States. Every tournament, including the women's World Cup, is a chance for Nike to showcase its latest innovations, athlete partnerships, and product launches. The 2026 men's World Cup kicked off on June 11. Team USA's first game the next day was a 4-1 win over Paraguay. Game 2 is on Friday against Australia. The next women's World Cup is next year in Brazil. The international reach of the men's and women's World Cup matches is massive. The 2022 men's tournament in Qatar reached roughly 5 billion fans globally across all media platforms, according to FIFA, the world's governing body of soccer. The 2023 women's World Cup, held in Australia and New Zealand, drew 2 billion in total engagement. In the midst of a difficult turnaround, which is taking longer than we expected and has led to frustration with the stock, this year's World Cup could not have come at a better time for Nike. To raise awareness, Nike released a short film, "Rip the Script," calling on soccer lovers to "embrace attacking, creative, instinctive and joyful" play. The energetic film features star players, including Cristiano Ronaldo, Kylian MbappÃ©, and Erling Haaland, fighting for the ball, with famous outlookers, including Kim Kardashian and Jason Sudeikis as Ted Lasso, trying to make sense of the chaos. For fans , Nike created interactive pop-up retail and community experiences across the country â from the House of Merc in New York City, featuring rare Nike archive products and exclusive collections, to Estadio Niky's in Los Angeles, a store takeover of soccer destination Niky's Sports with a custom-built field. To inspire the next generation of stars, Nike launched Toma el Juego (Spanish for "Take the Game"), a community-led youth soccer platform designed to bring together the best street ballers for games around the nation. "We want to ignite a new generation of footballers, and we're really excited about that, "Andrade told CNBC. The TOMA national finals will be held next week in Bryant Park in New York City. On the field at this year's World Cup, Nike makes the uniforms, known as kits in soccer, for Team USA and roughly a dozen other nations, including France, Brazil, and England. The kits feature Nike's most advanced cooling system. "We're introducing Aero-FIT through football to the world. So football has been the first sport that, in this offense, introduces a new innovation that is twice as breathable as our previous legacy textiles," Andrade said. He added that Nike plans to expand its latest creation. "This will scale across all sports. So, this summer you'll start to see Aero-FIT across tennis and different sports." Nike soccer cleats, or boots, are being worn by Team USA and many others. Cleats are on an athlete-by-athlete basis. Pink is all the rage at this World Cup â not only from Nike but from Adidas and Puma, too. Of course, all the kits, home and away, and boots are sold at retail. According to Andrade, consistency will ensure that Nike's World Cup momentum extends beyond this summer, especially in the U.S., where soccer competes for attention against the big three American sports â football, basketball, and baseball. The sportswear giant has been in rebuilding mode under CEO Elliott Hill for more than a year, prioritizing a shift to recenter the company around sport. "I'm optimistic that this is going to help them jumpstart the company," Oppenheimer analyst Brian Nagel told CNBC. Nagel, who maintains a buy rating on the stock, cited Nike's rollout of World Cup-related merchandise like its X2 football-inspired lifestyle collection, plus its role as a major kit supplier for national teams. There's some history that offers support for this view. In its 2023 fiscal third-quarter earnings report, following the 2022 men's World Cup, Nike said that soccer revenue for its Asia Pacific and Latin America (APLA) region grew by double digits. The tournament that year was moved from its normal June to July run to November through December to avoid the extreme desert heat. Nike credited its fiscal Q3 success to its Phantom GX soccer boots, which launched during that World Cup cycle. Nike also reported strong sales linked to the men's competition and growing excitement ahead of the 2023 Women's World Cup that followed. For fiscal 2023, Nike said global soccer sales grew 25%. Nike cited benefits from the 2018 men's World Cup. During Nike's fiscal first-quarter earnings call that followed, Nike's then-CEO Mark Parker cited strong sell-through of its soccer national team collections, fueled by energy created by the tournament, where Nike-sponsored teams competed in the tournament's first all-Nike men's final. During the company's fiscal first-quarter 2015 earnings call, which covered the period that included the 2014 World Cup, Parker said global soccer revenue grew at a strong double-digit rate. Nike also led in footwear market share in the world's nine largest soccer markets by the end of the quarter. Hill is no stranger to how Nike has handled World Cups in the past. He held many executive leadership posts during the aforementioned examples. He retired in 2020 after a decades-long career at Nike that began with an internship in 1988. The now-62-year-old Hill came out of retirement to lead Nike, starting in October 2024, inheriting a laundry list of challenges from his predecessor, John Donahoe, who was ousted after staying with a direct-sales approach for too long after Covid. The challenges facing Hill and his team: the continued repair of wholesale partnerships strained under Donahoe, the ongoing clean-up of classic inventory, and figuring out its troubled China business, which remains critical to a full comeback. Hill has made some positive strides in addressing these issues and looks forward to the World Cup's impact on Nike's business. "We're also utilizing the World Cup as an opportunity to catalyze the football marketplace for quarters to come," Hill said on the company's March earnings call. "By the end of the tournament, we will have elevated our presentation in more than 5,000 football [soccer] doors around the world with wholesale partners and Nike Direct, because winning in football goes beyond winning the World Cup." To measure World Cup success, the company plans to track a range of metrics, including consumer reach and engagement, store traffic, and digital conversion rates. It will also analyze product sell-through, or the percentage of inventory sold to customers after being sent to wholesale partners. But the question remains for investors whether World Cup momentum can translate into sustainable business growth beyond the tournament itself. Jefferies analyst Randy Konik told CNBC it is an obvious benefit for Nike. "You will start to probably regrow the business in the next few quarters." Konik also said that a boost from the World Cup, combined with better inventory levels and easing tariff-related pressures, may also help support improvement across the company and eventually be reflected in the stock. Konik stressed that patience is still necessary for investors, especially for those frustrated with Nike's recent stock performance. "If you're a long-term oriented investor, this is the stock for you, why? The reason is because what [Hill] is doing is he's taking a very measured approach, fixing one geography at a time, fixing one product category at a time." Nike's shares are down more than 28% year to date, stirring up doubt about how quickly Hill can turn the company around. RBC downgraded Nike's stock last week to a hold-equivalent rating and slashed its price target to $50 per share from $70. They said Hill's turnaround is taking longer than expected, but added he is making progress. Bottom line Despite frustrations with Nike stock, Jim Cramer has repeatedly expressed tremendous faith in Hill and thinks the CEO will be able to revive the brand. However, with all the good stocks out there, Jim suggested that the Club might have to move on before that happens. "I am giving them one more quarter," Jim said during our June Monthly Meeting this week. Nike reports its fiscal 2026 fourth quarter on the evening of June 30. Jim has also been surprised by Nike's inability to rally even after director and outgoing Apple CEO Tim Cook and Hill engaged in two rounds of insider buying. "I still can't believe you could have all that insider buying, and it hasn't meant a thing [to the stock]," Jim added. (Jim Cramer's Charitable Trust is long NKE, AAPL. 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 the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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