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Nike shares slumped because of deteriorating sales in China?
First-quarter revenue dropped 4 percent alongside a 26 percent currency-neutral plunge in Greater China that forced lower annual guidance
Nike cuts outlook as China sales slide 26%
Shares tumble after management warns revenue will shrink and slashes full-year targets to reset digital channels.
In a nutshell
Nike rattled investors by slashing its full-year financial outlook after first-quarter sales in Greater China plunged 26 percent on a currency-neutral basis. The sportswear giant met quarterly earnings targets of $0.48 per share on $11.2 billion in revenue, but warnings of an intentional retreat from discounted Chinese digital channels sent the stock down 3.64 percent to $33.87 after a sharp extended-hours selloff.
Highlights
- First-quarter revenue dropped 4 percent to $11.2 billion as Greater China sales plunged 26 percent on a currency-neutral basis.
- Diluted earnings per share matched or edged past market estimates at $0.48.
- Management cut full-year fiscal 2027 guidance, projecting a high-single-digit decline in annual revenue.
- Nike plans to eliminate thousands of non-core third-party online stores in China by January 2027.
- Nike shares dropped to an intraday low of $31.97 on October 2 before closing down 3.64 percent at $33.87.
From the Editor’s Diary
When discount channels begin eroding premium brand value, shrinking distribution intentionally is often the only remedy, even if the immediate cost is painful top-line contraction.
Who's involved
Nike, Inc.
U.S.-based global athletic footwear and sportswear designer
goal → Defend profit margins, eliminate excess retail stock, and restore sales growth
Elliott Hill
Chief Executive Officer of Nike
goal → Revitalize the core brand identity and reorganize global product lines
Dave Denton
Chief Financial Officer of Nike
goal → Reset financial guidance and rein in operating expenses through the Pace savings initiative
Anta Sports and Li Ning
China-based athletic apparel and footwear manufacturers
goal → Win market share from established international competitors in China
In short
Nike's turnaround just hit a wall in its most profitable growth market, forcing management to lower full-year financial targets and wipe out expectations of a quick rebound. The world's largest athletic apparel maker faces a prolonged sales slump that will shrink full-year revenue at a high-single-digit rate, as deep markdowns in Greater China force an intentional retreat from third-party online stores.
The retreat makes further revenue contraction almost certain in the coming quarters. Chief Executive Officer Elliott Hill and Chief Financial Officer Dave Denton warned that Chinese demand will worsen before stabilizing, because Nike must sever ties with unaligned digital sellers to protect brand prestige and curb discounting.
Whether this channel cleanup can restore growth remains uncertain until at least mid-November, when executives present detailed metrics at Nike's Investor Day. For now, the disclosure removes any near-term buffer for the stock, coming just weeks after the company lost its spot in the benchmark S&P 100 index of major U.S. corporations.
Previously in this story
Nike loses spot in elite US stock club
9 September 2026Index manager drops apparel maker after market value slides to $57 billion
How it unfolded
Quarterly Earnings Show China Deficit
Nike reported quarterly revenue of $11.2 billion after financial markets closed on October 1, 2026, meeting per-share earnings targets but surprising investors with a 26 percent constant-currency sales drop in Greater China and a downward revision to its annual outlook.
Shares Rebound Off Lows After Initial Tumble
News of a prolonged slump in China triggered an immediate 8.7 percent drop in late trading on October 1. The stock touched an intraday low of $31.97 the following morning before institutional buying trimmed losses, leaving shares down 3.64 percent at the close as markets priced in a slower recovery.
Where things stand
Nike shares finished the week near multi-year lows at $33.87 following the October 2 trading session. Management is working to shut down thousands of unauthorized digital storefronts in China by January 2027 while advancing its Pace cost-cutting drive, leaving investors focused on operational milestones due at an investor meeting in mid-November.