Nike Revenue Slips as Turnaround Effort Faces China Headwinds

Sportswear giant Nike reported another quarterly sales decline as it continued to face weak demand in China, falling direct-to-consumer sales, and a steep drop at its Converse brand.The Beaverton, Oregon-based company said on Wednesday that its fourth-quarter revenue fell 1 percent year over year to $11.0 billion. For the full fiscal year, revenue was roughly flat at $46.4 billion.Fourth-quarter profit rose sharply to $1.1 billion, up from $211 million a year earlier, according to the earnings report. The increase was helped by an expected recovery of tariffs, which Nike said provided a $986 million benefit. For the full fiscal year, net income fell 3 percent to $3.1 billion.“While we continue to face top-line headwinds, we’re encouraged by progress in performance product and are focused on consistent execution, improved profitability and scaling our wins to realize our full potential,” Chief Executive Elliott Hill said in a statement.Nike is working through a turnaround plan under Hill, a 32-year veteran who came out of retirement in 2024 to lead the company he helped build. His strategy has focused on rebuilding momentum in performance products, restoring wholesale relationships, and improving Nike’s brand positioning after a period of slowing growth and rising competition.There were signs of progress in some areas. North America, Nike’s largest region, continued to post sales growth, with fourth-quarter revenue rising 3 percent year over year. Wholesale revenue also rose 4 percent to $6.6 billion, reflecting Nike’s efforts to rebuild ties with retail partners after years of emphasizing direct-to-consumer sales.Running was another bright spot for the company. Nike said the category posted double-digit growth for the fifth consecutive quarter and added more than $1 billion in sales over that period.Still, Nike’s results showed several areas of weakness.Revenue in the Greater China region, which covers China and Taiwan, fell 12 percent year over year to $1.3 billion in the fourth quarter. The decline underscored Nike’s challenges in one of its most important international markets, where competition has intensified as domestic brands like Anta and Li-Ning offer high-end running shoes and other athletic gear at lower prices.Nike’s performance was mixed elsewhere. Sales rose 3 percent in North America and 1 percent in Asia Pacific and Latin America, while revenue fell 1 percent in Europe, the Middle East, and Africa.Nike Direct revenue fell 7 percent to $4.1 billion, weighed down by a 12 percent decline in Nike Brand digital sales and a 7 percent decline at Nike-owned stores. Converse revenue fell 32 percent to $244 million, due to declines across all territories.The company gave a cautious outlook for the first half of its next fiscal year. During Wednesday’s call with investors and analysts, outgoing Chief Financial Officer Matthew Friend said Nike now expects revenue to decline by a low- to mid-single-digit percentage during the period, reflecting a more difficult consumer and macroeconomic environment.“The environment around us continues to be volatile,” Friend said, pointing to evolving tariff policies, disruption in the Middle East, oil prices, weaker store traffic, and broader retail-sales pressure as factors that could affect costs and consumer behavior.“These assumptions reflect the macro environment as it stands today, and we are not expecting the environment to improve meaningfully over the next six months.”The company announced last week that David Denton, currently chief financial officer at Pfizer, will join Nike as executive vice president and succeed Friend in August. Friend will stay with the company for a period to support the transition.