Nike's shares slide amid China weakness

Nike (NKE) posted better-than-expected results for its fiscal third quarter, reflecting progress in its turnaround under CEO Elliott Hill, though challenges in China weighed on overall performance.

The company reported adjusted earnings per share of $0.35, surpassing Wall Street estimates of $0.31, News.Az reports.

Revenue reached $11.3 billion, slightly above analyst expectations of $11.34 billion, though down 3% year-over-year when adjusted for currency effects.

Despite the earnings beat, Nike shares fell more than 9% in premarket trading on Wednesday, as investors had hoped for stronger results.

The Nike brand itself saw 1% sales growth to $11 billion, exceeding expectations of a 0.5% increase. Converse, however, underperformed, with sales dropping 35% to $264 million, well below the forecasted 26% decline to $300 million, reflecting the early stages of a global market reset, according to Hill.

Revenue in Greater China declined 11%, driven by a 27% drop in equipment sales, alongside decreases in footwear and apparel. In North America, higher tariffs created a 130 basis point headwind on gross margins, which stood at 40.2%, slightly above the anticipated 39.8%.

“This quarter we took meaningful actions to improve the health and quality of our business,” said CEO Elliott Hill, who took over in 2024. “The pace of progress varies across our portfolio, but the areas we prioritized first continue to drive momentum. The work is not finished, but the direction is clear.”

News.Az 

By Nijat Babayev