Nike’s two key growth drivers—demand in China and its digital channel—have shown signs of strain. In the most recent quarter, Greater China revenues were essentially flat year-over-year after growing in low double digits the prior year, while consolidated digital sales declined by 15% as Nike Direct fell 12%. Management has reduced promotional days and markdown rates online, shifting closeout inventory to factory stores, but traffic and conversion rates remain below historical norms, pressuring gross margins for the second consecutive quarter.

As part of its operational realignment, Nike confirmed plans to eliminate 775 roles at U.S. distribution centers in Tennessee and Mississippi, following the 1,000 corporate job cuts announced last summer. These reductions represent roughly 1% of the global workforce of about 77,800 employees as of May, and are designed to accelerate the deployment of advanced technology and automation. The company expects these actions to sharpen its supply-chain footprint, reduce complexity, and ultimately contribute to improved EBIT margins over time.

Under CEO Elliott Hill’s ‘Win Now’ strategy, Nike is recalibrating its mix of direct-to-consumer and wholesale partnerships. Last March, CFO Matthew Friend outlined plans to integrate Nike Digital into an omnichannel marketplace while reviving wholesale relationships to stabilize volumes. Management forecasts that streamlining operations and refocusing on core running and lifestyle categories will position the company for a return to sustained revenue growth and margin expansion, though the timing of the turnaround will depend on the pace of digital traffic recovery and China market stabilization.