Nike shares down 10% in pre-market as China sales plunge, tariffs hit profits

Nike shares were much than 10% little successful pre-market commercialized connected Friday morning, arsenic concerns astir its show successful China outweighed the sportswear giant's net beat.

On Thursday, Nike posted quarterly net and gross that topped Wall Street's estimates, arsenic spot successful North America helped to offset a plunge successful China sales.

However, the company's banal was down astir 10.2% successful pre-market trading connected Friday, extending losses seen successful extended trading the erstwhile day.

Nike stock price

The banal question comes arsenic investors digested the weakness reported successful China and the sustained deed Nike is taking from higher tariffs.

Here's what Nike reported for its 2nd fiscal 4th of 2026, according to statement estimates from LSEG:

• Earnings per share: 53 cents vs. 38 cents expected
• Revenue: $12.43 cardinal vs. $12.22 cardinal expected

The diversion apparel retailer said income successful North America roseate 9% to $5.63 billion. But gross successful its Greater China marketplace dropped 17% to $1.42 billion.

Shares of German athleisure giants Adidas and Puma besides took a tiny deed connected Friday morning, arsenic concerns astir Nike's show spilled implicit to companies crossed the Atlantic.

Investors successful Western user discretionary companies, similar sportswear and luxury goods makers, are intimately monitoring the signifier of the critical Chinese market, wherever user request has been volatile for immoderate clip aft slowing sharply successful the aftermath of the Covid-19 pandemic.

Adidas reported 10% maturation successful China revenues successful its third-quarter net report. Puma shares, meanwhile, person already been connected a rollercoaster thrust this year, with aggregate days of double-digit losses since January. In its third-quarter net report, the institution said income successful the Asia Pacific portion fell 9% owed to a "significant decline" successful the Greater China wholesale business.

Nike is conscionable implicit a twelvemonth into CEO Elliott Hill's turnaround strategy, focusing connected regaining its maturation and marketplace share, clearing retired aged inventory and investing successful wholesale relationships.

"Fiscal twelvemonth '26 continues to beryllium a twelvemonth of taking enactment to rightsize our classics business, instrumentality Nike integer to a premium experience, diversify our merchandise portfolio, deepen our user connection, fortify our spouse relationships and realign our teams and leadership," Hill said connected a telephone with analysts. "And I accidental we're successful the mediate inning of our comeback."

"We're obscurity adjacent our potential," helium added.

Hill said Nike's improvements successful its China marketplace are "not happening astatine the level oregon the gait we request to thrust wider change," though helium said the state remains 1 of the company's astir almighty semipermanent opportunities.

Nike expects fiscal 3rd 4th revenues to autumn by a debased azygous digit percentage, with humble maturation successful North America. It besides anticipates gross margins volition driblet 1.75 to 2.25 percent points – including a 3.15 percent constituent deed from tariffs.

The institution said wholesale revenues climbed 8% to $7.5 cardinal during the quarter. But nonstop income — which were a absorption for Nike successful the years earlier Hill took implicit and moved distant from the strategy — fell 8% to $4.6 billion.

Nike has besides been feeling the interaction of tariff increases. It said Thursday that its gross borderline decreased by 3 percent points and inventories dropped 3% chiefly owed to higher tariffs.

The sneaker institution has been reporting weakness successful its Converse brand, too. In its archetypal fiscal quarter, Nike said Converse income dropped 27% – connected Thursday, it reported a 30% driblet successful revenues for the sneaker brand.

Despite the weakness successful immoderate parts of Nike's business, the institution highlighted immoderate areas of spot and caller initiatives ahead. CFO Matt Friend said connected the telephone that Nike.com posted its champion Black Friday ever this year, partially driven by its Air Jordan "Black Cat" launch.

Nike besides plans to motorboat a caller footwear level successful January called Nike Mind, which aims to assistance athletes hole for show and competition, Hill said connected the call.

Nike has been making larger interior changes nether Hill.

Earlier this month, Nike underwent enactment changes to "remove layers," according to Hill. Under its "Win Now" strategy, the institution announced that Chief Commercial Officer Craig Williams would permission the sneaker giant.

Hill called the shakeup a determination "about maturation and offense."

"Collectively, these changes magnitude to america eliminating layers and amended positioning Nike to proceed to person an interaction the mode lone Nike can," Hill said successful a connection astatine the time.

Nike shares were already down much than 13% this year-to-date astatine Thursday's close.

In a enactment pursuing the net update, Citi analysts said Nike's show successful China weighed connected their expectations for the company's broader recovery.

"Management expects 2Q China weakness to proceed for the remainder of [2026] arsenic they reset the marketplace spot (which volition instrumentality time)," they said. "This keeps america cautious connected the [2027] betterment and highlights the analyzable turnaround underway."