Nike’s grip on its spot in the Dow Jones Industrial Average is looking increasingly tenuous as the struggling sportswear giant braces for an exit from another Wall Street benchmark.
S&P Dow Jones Indices said this month it will remove Nike from the S&P 100 before trading begins on September 21, as part of a quarterly rebalancing, after 18 years in the index of blue-chip companies.
Analysts attributed the removal to an 80 per cent slump in the company’s market value following its struggles with slowing sales due to lack of innovation and competition from upstarts over the past five years.
The shakeup has investors doubting Nike will remain in the Dow Jones Industrial Average, the more than 130-year-old benchmark of blue-chip US equities.
Since it joined in 2013, Nike shares have risen 5pc while the S&P 500 has more than quadrupled. Nike’s share price, recently $36, makes it the smallest factor in the price-weighted Dow index, a position that has typically preceded other index removals. Nike declined to comment.
“Just looking at it historically, it probably is a candidate for removal,” said Josh Bischoff, partner and head trader at TimesSquare Capital Management.
Unlike the Nasdaq-100 and S&P 500, whose eligibility rules state market cap and public float limits, the Dow weights components by share price alone and has no stated eligibility-change triggers. But a Reuters analysis of the last 10 Dow changes since 2013 found at least half involved the stock with the smallest weight at the time of its removal.
Nike currently holds the smallest weight among the Dow’s 30 components, at 0.4pc. It is also the index’s worst performer this year.
The most recent change in the Dow’s constituents was the removal of telecom major Verizon Communications in June, in favor of Alphabet, which S&P Dow Jones Indices said was driven by Verizon’s low share price.
Nike’s share price decline has accompanied a prolonged struggle at the company. CEO Elliott Hill rejoined the sportswear maker in 2024 to lead a turnaround and emphasised during a June earnings call that the company is navigating a ‘more complex macro environment,’ with increased pressure on consumer traffic and discretionary spending across its markets.
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