Nike’s China E-Commerce Reset Sparks Analyst Concerns

Nike Inc. (NKE) announced plans to end online distribution through several of its China partners starting January 2027, a move that has drawn skepticism from Wall Street analysts. The company aims to create a more unified shopping experience by concentrating its online presence on major Chinese digital platforms like Tmall, JD.com, and Douyin, as well as its own website and app. However, analysts warn that this strategy could pressure sales trends and risk market share losses in China's competitive sportswear market.

Citi labeled the strategy 'extreme' and 'risky,' expressing concerns that it could create an opening for rivals such as Adidas. The firm maintained a 'Neutral' rating on the stock with a $45 price target, implying around 5% upside from Tuesday’s close. BNP Paribas called the decision a 'strategic misstep,' estimating the affected business generates $500 million to $1 billion in annual sales, or 1% to 2% of total company sales.

Bernstein noted that Nike’s sales trends remain weak, even as rivals like Adidas continue to outperform. The firm highlighted that Nike prices remain up mid- to high-single digits but maintained an 'Outperform' rating on the stock with a $72 price target, suggesting around 68% upside from the last close. Meanwhile, retail sentiment on Stocktwits for NKE was 'bearish,' with shares falling over 30% year-to-date.

Leading China distributors Topsports and Pou Sheng confirmed in exchange filings that existing online sales of Nike products would terminate completely from January 1, 2027. The move has sparked criticism from analysts, who warn it could bring negative press in China and further pressure the stock.