Nike Shares Plummet 14.5% to Decade-Low Levels Following CEO's Warning of Weak Sales Amid China Challenges

Nike Shares Plummet 14.5% Amid Gloomy Outlook and China Sales Decline

Nike, the sportswear giant, faced severe selling pressure on Wednesday, 1 April, as its shares plummeted 14.5% to an intraday low of $45.19. This marked the lowest level since October 2014. The decline in investor sentiment was largely due to the company's surprisingly gloomy outlook for current-quarter sales and slower-than-expected progress in its turnaround.

Elliott Hill, Nike's Chief Executive Officer, warned of another setback in one of its most critical markets. The company has seen sales decline in China for seven consecutive quarters, with the current quarter, ending 31 May, expected to be even worse. Nike is projecting a decline of up to 20% in the quarter.

Read also: Expert Portfolio Manager Raja Venkatraman Names Top Investment Picks for June 4

The sportswear division was another area of concern in the third quarter, with high levels of discounting. The segment recorded double-digit declines. Overall, the company expects revenue to decline 2% to 4%, weaker than Wall Street's view for growth of about 2%. Gains in North America are expected to be offset by weakness in Greater China, with earnings remaining flat.

The ongoing conflict in the Middle East has further complicated the company's turnaround plans, while the retailer continues to struggle to regain traction in China amid intense competition from domestic upstart brands. China used to be one of Nike's biggest growth engines.

On the earnings call, Chief Financial Officer Matthew Friend said the conflict in the Middle East had already disrupted shopping behavior in parts of Europe, the Middle East, and Africa, leading to softer store traffic and weaker sportswear sales.

Nike reported third-quarter results on Tuesday that beat estimates despite continued weakness in its China business and steep declines at Converse. The company reported adjusted earnings per share of $0.35, beating Wall Street analyst estimates of $0.31. Revenue of $11.3 billion was flat year over year, primarily due to declines in EMEA and Greater China, partially offset by growth in North America.

Read also: MarketSmith India's 4 June Stock Recommendations

Net sales in the period tallied $11.3 billion, flat from $11.3 billion on a reported basis and down 3% on a currency-neutral basis. Net income at the Beaverton, Oregon-based company in the third quarter of fiscal 2026 fell 35% to $520 million from $794 million in the year-ago period. Diluted earnings per share dropped to 35 cents from 54 cents.