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Nike (NKE) stock fell as much as 13% on Wednesday as the company’s turnaround efforts took a hit in the latest quarter, with its recovery in China stalling out and disruptions from the war in the Middle East weighing on its outlook.
With its decline on Wednesday, Nike’s stock was trading near an 11-year low.
Nike expects revenue to decline by the low single digits in 2026, with gains in North America offset by declines in Greater China. Earnings are expected to be flat.
“We also recognize that the environment around us has become increasingly dynamic and could experience unplanned volatility due to the disruption in the Middle East, rising oil prices, and other factors that could impact either input costs or consumer behavior,” Nike CFO Matthew Friend said.
Read more about Nike’s stock moves and today’s market action.
In its fiscal third quarter, Nike showed progress in its uneven turnaround under CEO Elliott Hill and reported better-than-expected earnings.
The company reported adjusted earnings per share of $0.35, beating Wall Street analyst estimates of $0.31, according to Bloomberg data. Revenue of $11.3 billion was flat year over year but higher than the $11.34 billion analysts expected. Revenue fell 3% over the previous year when adjusted for currency impacts.
Revenue in Greater China declined 11% for the quarter, dragged lower by a 27% decline in equipment sales, followed by footwear and apparel.
For the current quarter, Nike expects revenue to decline between 2% and 5%.
The Greater China segment is expected to see sales drop by roughly 20% next quarter, “reflecting reduced sell-in that we highlighted last quarter, as well as accelerated actions to clean up the marketplace.”
“They’re in the middle of a turnaround,” CFRA analyst Zachary Warring said. “They’re working on a lot of different things, which is why I think you’ve seen a muted reaction. There’s just not much to get excited about.”
Revenue for its direct-to-consumer business, Nike Direct, decreased 4% to $4.5 billion, in line with estimates. The company previously said it expects to see growth in the segment this fiscal year as it returns its focus to wholesale operations.
Wholesale revenue increased 5% to $6.5 billion. Wall Street analysts had forecast a drop of roughly 3% to $6.4 billion.
The namesake Nike brand grew sales by 1% to $11 billion, surpassing expectations for a 0.5% increase from a year ago.
Sales at Converse, which Hill said in a previous quarter is in the “early stages of a global market reset,” were far weaker than expected, dropping 35% to $264 million. The Street forecast a roughly 26% decline to $300 million.
