Shares of athletic footwear and apparel giant Nike Inc. have fallen to their lowest level in twelve years, slumping seventy-seven percent from their November twenty twenty-one highs. Against this backdrop, the stock’s dividend yield has risen to nearly a record high of four percent.

If Nike raises its dividend payout later this year, it will mark twenty-five consecutive years of payment increases and join the elite group of Dividend Aristocrats. However, the company faces severe financial challenges: the stock is closing in the red for the fourth straight year, while current earnings and free cash flow barely cover payouts to shareholders.

In fiscal year twenty twenty-six, Nike allocated two point four billion dollars to dividends with net income at three point one billion dollars. However, that net figure includes a one-off factor — a refund of nearly one billion dollars in IEEPA tariffs, without which dividend payments would have exceeded adjusted net income. To preserve cash, the company has already significantly reduced its share buyback program.

Despite heavy pressure on the balance sheet, analysts do not expect a dividend cut this year, as such a move would spook investors. Nevertheless, if management’s business recovery program fails to deliver sustainable revenue and operating cash flow growth, a payout reduction could eventually end up on the table.