Nike is experiencing a significant downturn in its China market, with sales declines persisting for seven consecutive quarters. CEO Elliott Hill described China as "the longest road ahead" in the company's turnaround efforts. CFO Matt Friend predicted a 20% drop in sales for the current quarter and expects China to remain a weak point throughout the next fiscal year, ending next spring. This ongoing struggle raises doubts about the effectiveness and pace of Hill's turnaround strategy.
The iconic sneaker maker's shares tumbled 13% following the announcement, reaching their lowest level in over a decade and falling 29% in 2026. This financial hit is largely due to the challenges in China, which historically was a key growth driver and Nike's biggest market outside North America. The company's efforts to clear out old inventory and drive full-price sales are becoming a drag on revenue growth.
Nike faces fierce competition from domestic rivals like Anta Sports Products and Li Ning. Anta's sales jumped 13% in 2025 to about $11.6 billion. These local brands offer similar athletic footwear at significantly lower prices, an advantage in a slowing Chinese economy, and have extensive retail networks. Industry insiders also point to Nike's eroding premium positioning, sluggish inventory management, and a top-down decision-making culture that hinders responsiveness to local demand as contributing factors to its struggles.
