Nike warns fiscal 2026 sales slump and 20% China decline, cites tariff drag
Nike warned of weaker-than-expected fiscal 2026 sales after beating Q3 earnings, forecasting a roughly 20% year-over-year revenue decline in China and citing elevated restructuring and tariff costs. It plans price increases, tighter inventory controls and supply-chain optimizations to counter gross margin pressure.
1. Fiscal 2026 Sales Warning
Nike beat Q3 earnings estimates but issued a cautionary forecast for fiscal 2026, noting that softer consumer demand and market volatility will drive sales below prior expectations. The warning overshadowed the positive EPS surprise and led analysts to revise down full-year revenue targets.
2. China Market Headwinds
The company expects a roughly 20% year-over-year revenue decline in its Greater China segment, attributing the slump to ongoing market corrections, intensified local competition and brand repositioning challenges. Management signaled that these cleanup efforts could continue to weigh on China sales through fiscal 2027.
3. Margin Pressure and Mitigation Measures
Elevated tariff expenses and planned restructuring charges are creating gross margin drag for Nike, pressuring overall profitability. In response, Nike is rolling out price increases, enforcing tighter inventory controls and optimizing its global supply chain to stabilize and rebuild margins.