Barclays Stands by Nike Despite China Sales Drop and Stock Low

Nike Inc. (NKE) saw a modest stock increase of 0.27% to $33.96, despite ongoing challenges in its business. Barclays maintained a Buy rating on the stock but lowered its price target from $48 to $37, reflecting a more cautious outlook. The adjustment comes as Nike reported a 4% drop in revenue to $11.21 billion, missing Wall Street's expectations of $11.32 billion.

One of the biggest concerns for Nike is its struggling performance in China, where sales plummeted 26% during the fiscal first quarter. The decline highlights weaker demand and increased competition from local sportswear brands. Nike is now reassessing its strategy in the region, including pricing, product launches, and distribution channels.

Nike's stock has been under significant pressure, falling about 47% in 2026 and trading near a 13-year low. The company's shares have lost roughly 77% over the past five years, reflecting a prolonged market decline. Barclays, however, believes the current reset could serve as a foundation for a broader recovery, provided operating trends begin to stabilize.

Management is implementing various measures to restore sales and improve profitability, including job cuts and cost reductions. The company expects fiscal 2027 revenue to decline by a high-single-digit percentage. Barclays' Buy rating hinges on Nike demonstrating that recent weaknesses can transition into steadier financial performance.