Nike China Revenue Falls 22% to $1.18 Billion, Segment Profit Drops 34%
Key Facts
Nike recorded revenue of $1.18 billion in Greater China in the three months ended August 31, 2026, down 22% on a reported basis and 26% excluding currency changes from $1.512 billion a year earlier. The company reported the figures in its fiscal 2027 quarterly report, saying the decline spanned the region’s main sales channels. Segment profit before interest and taxes also fell 34% to $248 million, from $377 million in the year-earlier period. That means segment profit declined faster than revenue during the quarter. Chief Executive Elliott Hill said the company “still has work to do” in Greater China, NIKE Sportswear and Jordan Brand, and that it is taking steps to strengthen those businesses over the long term.
The contraction extended to wholesale and direct sales, according to Nike’s figures on performance excluding currency. Wholesale revenue fell 31% year over year, while NIKE Direct revenue declined 18%. Within the direct channel, digital sales fell 28%, compared with a 14% decline in store sales. The figures show that the drop in digital sales was steeper than the decline in stores, while wholesale recorded the largest fall among the channels cited. Nike said weaker store traffic, increased promotional activity and higher market inventory “are negatively impacting revenue and gross margin” in Greater China.
The quarterly decline followed weakness that extended into the previous fiscal year: Greater China revenue was about $5.847 billion in fiscal 2026, compared with $6.586 billion in fiscal 2025. Revenue fell 13% excluding currency changes, or 11% on a reported basis. Globally, the company’s gross margin rose 60 basis points to 42.8% in the first quarter of fiscal 2027. Nike attributed the improvement mainly to lower storage and logistics costs. The result puts the company’s gross-margin improvement in the same quarter alongside falling China revenue and lower segment profit.
Nike’s China figures come as it faces competition from local brands, according to a Reuters report published in March. The report said Anta and Li Ning had benefited from flexible supply chains and extensive store networks to offer competitively priced products across China. In July, Reuters reported that Nike planned to withdraw online sales rights from major wholesale partners in China starting in January, directing digital sales to its official stores and authorized platforms. The distribution-channel change comes as quarterly results showed wholesale revenue down 31% and digital sales down 28%, excluding currency under the company’s definition of the figures. Nike did not directly link the decline to competitors in its official disclosure, but said store traffic, promotions and inventory were weighing on performance.
On its outlook, Nike said it expects fiscal 2027 revenue to decline in the high-single-digit range and will update its assessment as the year progresses. It added that actions to reduce supply in key parts of the market will weigh on reported revenue for the rest of fiscal 2027, with effects extending into fiscal 2028. In October, the company announced its multiyear Pace program to improve productivity and cut costs, and plans to organize its operations into three geographic regions in fiscal 2028. Nike expects the program to generate cumulative savings of about $2.5 billion through fiscal 2031, offset by pretax charges of about $1 billion over the same period. In China, the official manufacturing Purchasing Managers’ Index was 50.1% in September 2026, up 0.3 percentage points from the previous month and entering expansion territory; the next monthly index report is scheduled for October 31.
The market reacted to Nike’s outlook earlier in the month, with the stock falling 8.5% in extended trading after the company issued its forecast on October 1, 2026, according to Reuters. In the latest trading data provided, NKE shares closed at $37.30 on October 23. The close followed the company’s fiscal-year revenue outlook, while quarterly China figures remain part of the pressure on its business in the region that the company cited. The PMI data due on October 31 provide a near-term economic indicator for tracking Chinese manufacturing activity. As for Nike’s revenue trajectory in fiscal 2027, the company said it will update its assessment as the year progresses.