Nike's Jordan brand is gaining traction among sneaker resellers, according to Citi, offering a glimmer of optimism for a company still working to recover its footing. However, the data does not yet justify a buy call on NKE stock, which remains down more than 40% year-to-date.
Citi's tracking indicates Nike captured 72.3% of resale volume in September, up 63 basis points from August, with Jordan accounting for most of the improvement. That figure also surpassed the 70.8% average seen between June and August. While the uptick is notable, investors should be cautious about interpreting stronger resale share as evidence of a broader financial turnaround.
Resale share vs. actual sales growth
The key distinction lies between secondary-market share and Nike's own revenue. A larger slice of resale transactions does not necessarily mean more Nike sneakers were sold overall, nor does it clarify whether resale prices strengthened or sellers earned better margins. Frequent trading can occur even when pricing power is weak, and an oversupplied model changing hands at a discount tells a different story than a coveted shoe commanding a premium.
September's resale share also remained 4.7 percentage points below the 77.0% peak recorded in October 2023. The improvement is encouraging, but it falls short of demonstrating that Nike has restored its former dominance in the secondary market. In short, resale transactions themselves do not directly translate into reported revenue gains.
Nike's deliberate supply tightening at Jordan
There is a credible bullish interpretation: Jordan retains consumer relevance while Nike works to repair its distribution strategy. On its latest earnings call, management acknowledged oversupplying iconic Jordan retro products and outlined plans to reduce the volume and frequency of selected launches. Jordan represented 13% of NKE's global business in Q1, with sales declining in the mid-teens.
The investment logic is that tighter supply may eventually restore exclusivity, reduce the need for discounts, and improve the economics of future releases. However, September's resale share does not prove that this strategy is already succeeding. Nike also faces a difficult trade-off: selling fewer pairs can protect a franchise's desirability while hurting near-term revenue. Investors buying the turnaround must accept that healthier brand positioning and faster sales growth may arrive on different schedules.
NKE shares need a stronger earnings case
All in all, there's reason to remain cautious on NKE shares; Jordan's resale improvement is insufficient reason to load up on them today. There are encouraging operating signs: Nike's performance portfolio grew at a high-single-digit rate in the first quarter, while gross margin expanded 60 basis points to 42.8%. Yet management still projected a high-single-digit revenue decline for fiscal 2027, underscoring how heavily the weaker businesses weigh on the recovery.
For shareholders, the decisive issue is how much sustainable profit Nike can generate while resetting Jordan, Sportswear, and Greater China. A resale-share gain offers limited help in answering that valuation question.
This article is for informational purposes only and does not constitute financial advice.
