Nike needs adjustments at all levels: sales are declining as consumers switch brands, costs are rising from tariffs, and its 'Pace' restructuring is taking longer than expected, leaving investors impatient and the stock near a 52-week low. I've been disappointed for over two years that Nike can't sell at full price.

Nike's business needs adjustments on all levels. Sales are declining as consumers switch to other brands and find it difficult to afford some of Nike's expensive products .

On the other hand, Nike's costs are rising as its manufacturing bases outside the United States are now subject to significant tariffs. So, they are making major adjustments to try to adapt to the current environment, but it is taking longer than expected, investors are losing patience, and Nike's stock is falling significantly and trading near its lowest level in 52 weeks.

One of the things Nike is doing is giving their overall restructuring effort a name: "Pace" . They say that this work is already underway.

They are developing their supply chain from a mostly fixed structure to a more flexible one. As part of that, they are building a new complex in Bengaluru, India.

Nike is not taking things for granted; it is reducing its reliance on manufacturing facilities in Southeast Asia and moving to Bengaluru in India.

As part of these restructuring efforts, Nike expects to reduce its overall number of jobs. In other words, there are very large job cuts coming at Nike. The reason for making major changes is that the business is going in the wrong direction.

Sales are declining, profits are falling, and investors are disappointed.

In the fourth quarter, revenues reached 11.2 billion, a decrease of 4% compared to the same quarter last year. The gross profit margin reached 44.8%, a slight increase compared to the same period last year due to the removal of some tariffs that were in effect last year for this year.

They also benefited from some supply chain management efforts . However, this was offset by increased discounts in addition to a mix of sales channels.

Therefore, more of Nike's sales come through wholesalers, and of course these come with lower profit margins, which has affected their profit margins. There are also many discounts and promotional activities at Nike.

This is an area where I have been very disappointed for almost two years or more , as Nike has been talking about wanting to sell more products at full price. They have been repeating this on almost every quarterly call for the past few years, but they continue to offer discounts and great promotional activities.

As a customer, I am pleased that I have been able to get great Nike shoes at low prices recently, but as an investor, there is disappointment because the reality on the ground is that they are unable to sell their products at full price.

Therefore, a discount is necessary to clear inventory so that it does not become too old or less attractive to customers who keep returning to these channels and seeing the same inventory over and over again .

This reduces customer visits and makes their wholesale partners feel even more disappointed.

Thus, although Nike would like to sell more products at full price, not at current inventory levels. If Nike wants to sell more products at full price, it has to drastically reduce its product manufacturing to decrease available inventory.

In doing so, they can sell more of this inventory at a higher price, clear it out, and keep products fresh in their partner networks in wholesale channels.