Nike (NKE) Stock Falls 10% After Weak Sales Outlook and China Concerns

TLDR

• Nike beat Q3 earnings and revenue estimates but gave a weaker-than-expected Q4 outlook
• Q4 sales expected to fall 2%–4%, vs Wall Street’s forecast of a 1.9% rise
• Greater China revenue dropped 7% to $1.62B — a seventh straight quarter of decline, with a 20% drop expected next quarter
• Gross margin fell 1.3 percentage points to 40.2%, hit by higher tariffs in North America
• Nike stock slumped more than 9% in premarket Wednesday, trading around $47.88

Nike posted a solid Q3 beat on Tuesday, but the market wasn’t interested. Investors sold off the stock after the company delivered a gloomy sales outlook and flagged continued pressure in China.

CFO Matt Friend said Nike expects Q4 sales to fall 2% to 4%. Wall Street had been pencilling in a 1.9% increase. For the full calendar year, Nike now sees sales falling by a low single-digit percentage.

Q3 earnings came in at 35 cents per share on revenue of $11.28 billion. Analysts had expected 28–30 cents and $11.23–11.24 billion respectively. A clean beat — but the guidance stole the spotlight.

NIKE, Inc., NKE

Net income for the quarter dropped 35% year-over-year to $520 million, down from $794 million a year ago. Gross margin slipped 1.3 percentage points to 40.2%, with Nike pointing to higher tariffs in North America as the main culprit.

China Remains the Problem

Greater China revenue fell 7% to $1.62 billion, marking the seventh consecutive quarter of decline. Nike is now bracing for a 20% drop in that market during Q4. The region accounts for roughly 15% of Nike’s global revenue, so that’s not a number the market can brush off.

Barclays analyst Adrienne Yih said the key takeaway was “the depth and slow speed of a very deliberate Greater China reset, likely to take four quarters to return to growth.” She added that the stock is “likely to be range-bound in the near term” but called levels under $50 an attractive entry point for longer-term investors.

Nike is also losing ground in China to local rivals Anta and Li Ning, as well as gaining competition globally from On Running and Hoka.

North America held up. Revenue there climbed 3% to $5.03 billion, just shy of the $5.04 billion estimate. Wholesale revenue rose 5% to $6.5 billion, while direct sales slid 4% to $4.5 billion — reflecting CEO Elliott Hill’s deliberate push back toward wholesale partners.

Turnaround Still in Progress

Hill, who returned to lead Nike at the end of 2024, has been upfront that the recovery won’t happen overnight. He said Tuesday that “the pace of progress is different across the portfolio.”

Friend also flagged external risks, including disruption in the Middle East and rising oil prices, which could affect both input costs and consumer spending. He stressed that Nike’s guidance reflects current conditions and could shift.

Nike stock has now fallen 15.8% in 2025 and is down another 17.1% so far this year. Frankfurt-listed shares dropped 8.7% at Wednesday’s open.

Jefferies analysts, led by Randal Konik, called Q3 a sign of “steady progress” with cleaner inventories and building momentum in North America and wholesale, but acknowledged China and Nike Digital remain “areas to work through.”

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