Nike just can’t do it in China

Nick Iluzada

Nike’s turnaround has hit a huge wall in China—and that’s anything but great for shareholders. The company’s earnings call this week revealed that sales in China fell for the seventh consecutive quarter, and that they’re expected to remain weak for the rest of the year. The company’s shares crashed by ~15% in response to its bleak outlook in China, even though Nike’s fiscal Q3 earnings and revenue beat expectations. The recovery remains in progress CEO Elliott Hill was brought on board in 2024 to return Nike to its glory days by refocusing the brand on sports. Some progress has been made, as revenue in North America grew for a second straight quarter. But overseas problems had Hill venting in an all-hands meeting that “I’m so tired, and I know you are too, of talking about fixing this business,” according to Bloomberg: In China, consumers are pulling back as they look for bargains during tough economic times—but other foreign brands aren’t being hit as hard as Nike. Nike CFO Matthew Friend blamed the conflict in the Middle East as a disruptor to shopping patterns in the region, as well as in Europe and Africa. Nike also cited US tariffs eating into the company’s bottom line. Looking ahead…the company is expecting continued growth in North America and plans to offer longer-term guidance to investors this fall.