Even Steep Discounts Can't Boost Sales... World’s Top Brand Sees Stock Plunge 17% This Year

Nike Projects 2–4% Revenue Decline for March–May
Weakness in China and Europe, Ongoing Impact from War and Other Factors

Nike, the world’s leading sports brand, saw its stock price plunge after issuing an earnings outlook that fell short of market expectations.

According to Bloomberg News on April 1 (local time), Nike stated during its earnings conference call that sales for the fourth quarter of fiscal year 2026 (March to May) are expected to decline by 2% to 4%, with a continued low single-digit decrease anticipated through the end of the year. This contrasts with Bloomberg’s market consensus, which forecasted a 2% quarterly increase and further growth afterwards.

Nike Store. Photo by Reuters and Yonhap News Agency

CEO Elliott Hill remarked, "This is a complex task, and some aspects are taking longer than I would like," adding, "However, the direction is clear, the sense of urgency is evident, and the foundation is gradually strengthening."

Nike is attempting to regain market dominance after a prolonged period of sluggish sales, but is facing multiple headwinds. Inventory levels remain high in Europe and the Middle East, while consumer demand has slowed and distribution has been disrupted due to the ongoing war. In addition, continued weakness in the Greater China region and other markets has diluted the strong performance in North America.

Nike shares down about 17% this year... "Ongoing pressure from war and other factors expected"

Before the market opened on April 1, Nike’s share price fell as much as 9.8%. Year-to-date, the stock is down approximately 17% based on the previous day's closing price. CEO Hill is pursuing business normalization through a strategy focused on core sports categories such as basketball and running, but still faces the challenge of addressing weak sales in the Chinese market and its subsidiary, Converse. Converse’s sales in the previous quarter declined more sharply than the market expected.

For the third quarter of the previous fiscal year, revenue stood at $11.3 billion (17.0291 trillion won), exceeding Bloomberg’s estimate, but showing no increase compared to the same period last year. Consumer demand in North America was relatively solid, but additional weakness persisted in Europe and the Middle East.

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Poonam Goyal, an analyst at Bloomberg Intelligence, commented, "The war is impacting performance and profitability in the Europe, Middle East, and Africa (EMEA) region, including through tariffs," and analyzed that "such pressures are likely to persist in the short term."

Impact of China's Economic Slowdown... Greater China quarterly sales down 20%

The Greater China region is also a major burden. Sales in this market are expected to fall by about 20% this quarter. The media outlet noted, "With China facing an economic slowdown, a real estate crisis, and employment instability, consumer spending is shrinking and discount sales are becoming more important." It also pointed out that "competition with local companies has become fiercer."

Randall Konik, an analyst at Jefferies, described Nike’s business restructuring in China as "a painful process," but noted that progress is being made in reducing excess inventory.

The sportswear segment is also a concern, as deep discounts led to a double-digit decline in sales in this category.

However, North American wholesale sales continued to recover. The company stated that summer season orders remain robust and shelf space is being regained, expressing expectations for moderate growth in North America through the end of the year.

This content was produced with the assistance of AI translation services.