Nike Forecasts Unexpected Sales Decline as China Weakens
The sportswear giant expects fourth-quarter revenue to fall up to 4% as competition and inventory issues persist in China. Shares dropped 9% on the news.
Shares of NIKE, Inc. tumbled more than 9% in extended trading following a disappointing sales forecast for the fourth quarter. The sportswear giant cited persistent economic headwinds in China and a slower-than-anticipated clearing of older inventory as primary obstacles to its ongoing turnaround strategy. Under the leadership of CEO Elliott Hill, the company has attempted to revitalize its core running business and reduce promotional activity, though these efforts have yet to stabilize the top line.
CFO Matt Friend projected a revenue decline of 2% to 4% for the current quarter, a sharp contrast to Wall Street expectations of a 1.9% increase. The situation is particularly acute in the Chinese market, where sales dropped 10% in the third quarter and are anticipated to plunge by 20% in the fourth. This regional downturn is attributed to operational challenges and intensifying competition from domestic brands such as ANTA Sports Products Limited and Li Ning Company Limited.
