Nike Stock Slides as China Weakness Deepens Premium Reset Concerns

Nike (NKE) stock fell about 4% on the day after the company released its latest quarterly earnings. This drop extends a three-month slide of roughly 23%. The revenue for the quarter came in at US$11.2 billion, which is down 4.3% from the same period last year, but still aligns with management's guidance.

However, what's concerning investors is that Nike now expects its full-year sales to decline by a high single-digit rate and sees an even sharper near-term hit to profit. This is because the company is pulling back on volume in Sportswear, Jordan, and China to protect its brand and pricing power.

Bulls argue that Nike can revive growth by leaning into premium products, cleaner channels, and higher-quality sales. The latest quarter gives partial proof of this strategy, as gross margin ticked up to 42.8% while revenue declined 4.3%. This suggests the business is trading volume for healthier pricing and mix rather than chasing every dollar of demand.

On the other hand, bears see a messy reset where China, supply chain shifts, and fading brand heat keep earnings under pressure for years. The quarterly results largely line up with this concern, as Greater China revenue fell 26%, and management openly guided to conditions in that region getting worse for the rest of FY27 as the digital cleanup ramps.

Management has flagged an even sharper near-term hit to profit, as the company pulls back volume in Sportswear, Jordan, and China to protect its brand and pricing power over the coming years. The reset is real, but so is the earnings drag it brings.