Nike’s Greater China revenue falls 26% year over year to $1.18 billion
Key Facts
Nike’s revenue in Greater China was $1.18 billion in the three months ended August 31, 2026, down 22% on a reported basis and 26% excluding currency changes compared with the first quarter of the previous fiscal year, according to the company’s quarterly report. The decline was steeper than the drop in global revenue, which was $11.2 billion, down 4% as reported and 5% excluding currency effects. In the region, earnings before interest and taxes fell to $248 million from $377 million, a 34% decline. The figures show pressure widening from sales to operating profitability in Greater China during the quarter. Chief Executive Elliott Hill said the company had “more work to do” in sportswear, Jordan Brand and Greater China.
The decline extended to major distribution channels, with wholesale revenue down 31% excluding currency in the first quarter of fiscal 2027. Nike Direct revenue fell 18%, with digital sales down 28% and store sales down 14%. The digital drop was therefore steeper than the decline in store sales, while wholesale posted the largest fall among the channels cited. Nike attributed the negative impact on revenue and gross profitability to “lower store traffic, higher promotional activity and elevated marketplace inventory levels.” The combination of these factors is weighing on the region’s results as the company works to reset its sales channels and inventory.
As part of its digital-sales reorganization, Nike said it would focus the Chinese market on fewer experiences, including its official stores on Tmall, JD and Douyin, as well as NIKE.com and the Nike app. The company announced in July that it would direct online sales to its official channels as it sought to win back shoppers and counter local competitors. Reuters reported at the time that some major partners would stop selling Nike clothing and footwear online starting in January and shift to in-store sales. The plan followed eight consecutive quarters of declining Nike sales in China, Reuters reported. These steps provide context for the distribution shift, whose impact the company said would weigh on sales in the coming period.
Nike said the majority of its partners’ physical stores in Greater China had not been updated in the past seven years. In Shanghai, its House of Innovation store recorded growth for 10 consecutive months “since making this shift,” according to the earnings-call transcript. The company is pairing updates to partners’ stores with a narrower set of digital experiences as part of its efforts to address the region’s performance. In the broader market, Chinese retail sales of consumer goods rose 0.4% year over year in August, while sales at specialized brand stores fell 10% in the first eight months of 2026, according to China’s National Bureau of Statistics. The figures provide context for retail activity, while Nike attributed pressure on its business to store traffic, promotions and inventory.
On global results, consolidated gross margin rose 60 basis points to 42.8% in the first quarter of fiscal 2027, which Nike said was mainly due to lower storage and logistics costs. But the company forecast fiscal 2027 revenue to decline in the high-single-digit range. In China, it said the measures underway would put more pressure on revenue than in the first quarter for the rest of the fiscal year, and that some effects of the market reset could extend into fiscal 2028. It also forecast China revenue to decline in dollar terms for the rest of fiscal 2027 as it continues measures aimed at returning the business to a healthier long-term trajectory. The guidance shows that the distribution shift and market management will continue to influence the region’s results in coming quarters.
As part of its restructuring, Nike expects its Pace program to generate cumulative savings of about $2.5 billion through fiscal 2031, with pretax charges of about $1 billion over the same period. The company plans to organize its operations into three geographic regions in fiscal 2028: the Americas; Asia Pacific and China; and Europe, the Middle East and Africa. In the market, Nike shares fell 8.5% in extended trading on Oct. 1 after the company forecast a sharp decline in annual revenue, according to Reuters. EL7 data showed the shares closed at $37.30 on Oct. 23. The after-hours move reflected investors’ response to the company’s outlook on that date, while the Oct. 23 price was a separate, later closing level.