Nike Stock Tanks, China Sales Plummet
Business & Finance News Today | 2 Min News | The Daily News Now! · The Daily News Now!
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Show Notes
Nike stock plummeted 13% on Wednesday, reaching an 11-year low, as their quarterly results revealed setbacks in their turnaround plan. Despite beating revenue estimates at $11.3 billion and surpassing earnings per share expectations, China sales plummeted 11%, dampening recovery hopes. Nikes grim outlook includes a projected low single-digit revenue decline in fiscal 2026, with flat earnings overall. The company anticipates a 2-5% sales drop in the current quarter, with China potentially facing a 20% slump due to inventory issues. Investors reacted harshly, sending shares tumbling amid concerns about progress under new CEO Elliott Hill. The Middle East conflict and rising oil prices add uncertainty, potentially increasing costs or deterring shoppers. Nikes wholesale revenue surged 5% but direct-to-consumer sales fell 4%, with Converse suffering a 35% drop. Despite tariff hits, gross margins remained stable at 40.2%. Nike is pressing ahead with portfolio adjustments, finding momentum in key areas, but the path forward remains challenging due to global disruptions.
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