Nike prepares for structural reset amid persistent China contraction

A 17% decline in Greater China revenue, calculated on a constant-currency basis, has forced a recalibration of the timeline for a recovery at the world's largest sportswear company. The contraction, sustained through the fourth quarter, highlights a structural shift as domestic competitors such as Anta and Li Ning absorb market share. Nike now projects revenue will continue to decline through the first half of fiscal 2027, an acknowledgment that the transition from a direct-to-consumer lifestyle strategy back to a sports-performance focus will not be immediate.

Chief Executive Elliott Hill is managing an uneven recovery. While North American revenue rose 3% as the company rebuilt sidelined relationships with wholesale retailers, the broader operating environment remains constrained by elevated inventory levels and consumer caution in the sportswear category. The administrative complexity of the turnaround was illustrated by a one-off $986 million benefit from tariff refunds, which aided quarterly earnings even as underlying margins faced pressure from heavy discounting required to clear older product lines.

Progress is currently measured in product cycles rather than fiscal quarters. Hill indicated that more than a dozen footwear styles are scheduled for launch in the latter half of the year, intended to counter heightening competition from Adidas and Hoka. While demand for football products showed signs of stabilization following the World Cup marketing cycle, the company continues to work through excess inventory with retail partners in China, where revenue trends are expected to remain under pressure for at least another six months.