<div id="readability-page-1"><img width="1536" height="1024" src="https://imageproxy.pbkrs.com/https://invezz-wp-media.lon1.digitaloceanspaces.com/2026/04/image-1.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://invezz-wp-media.lon1.digitaloceanspaces.com/2026/04/image-1.png"/>Shares of Nike fell sharply in after-hours trading after the company warned of a decline in current-quarter revenue, underscoring persistent challenges in its key China market and an uneven turnaround trajectory.The sneaker maker said it expects revenue to fall between 2% and 4% in the ongoing quarter, driven largely by a projected 20% drop in China sales.The outlook overshadowed an otherwise better-than-expected quarterly performance, sending the stock down nearly 9% in extended trading, and it was also down by the same magnitude during premarket trading on Wednesday.<h2>China's weakness remains a key drag</h2>Nike’s struggles in China continue to weigh on overall performance.Sales in the region declined 7% in the quarter ended February 28, an improvement from a steeper 17% drop in the previous quarter but still indicative of subdued demand.Executives signalled that the near-term outlook remains challenging, with further deterioration expected in the current quarter.Weakness in China, along with softer demand for Converse and sportswear lines, has offset gains in other markets.In contrast, North America showed signs of resilience, with revenue rising 3% year-on-year.Sales also increased across Europe, the Middle East and Africa, as well as Asia Pacific and Latin America, offering some support to the overall topline.<h2>Earnings beat fails to reassure investors</h2>Nike reported quarterly revenue of $11.3 billion, broadly flat compared with the same period a year earlier but ahead of Wall Street expectations.However, profitability declined, reflecting ongoing cost pressures and discounting activity.Net income fell to $520 million, or 35 cents per share, from $794 million, or 54 cents per share, a year earlier.Despite the drop, earnings still came in above analyst forecasts of 29 cents per share.Chief executive Elliott Hill acknowledged that the company’s turnaround is progressing more slowly than anticipated.“Parts of it are taking longer than I’d like, but the direction is clear,” he said.<h2>Inventory clearance and promotions weigh on margins</h2>A key challenge for Nike remains its effort to clear excess inventory built up over recent quarters.The company has been stepping up promotional activity globally, particularly in Europe and on its digital platforms, to reduce stock levels.Chief financial officer Matt Friend said promotions across the marketplace have increased compared with last year, adding that the company has been “more aggressive” with discounting on its digital channels.Even with these efforts, Nike expects inventory levels to remain elevated into the next quarter, citing ongoing demand softness, continued promotions and disruption linked to geopolitical tensions in the Middle East.The prolonged inventory clearance cycle has raised concerns among investors.Morningstar analyst David Swartz said the timeline has been longer than expected, prompting questions about execution.“They’ve been saying they were doing that since the fourth quarter of last fiscal year, so investors may be asking, ‘Why wasn’t that enough?’” he said.<h2>Cost cuts and long-term reset underway</h2>Nike has also moved to streamline operations as part of its broader restructuring.Earlier this month, the company said it expects to incur $300 million in pre-tax charges related to cost-cutting measures, including job reductions.Around 775 roles are set to be eliminated, primarily at distribution centres in the US.Hill, who returned to lead the company in 2024, said organisational changes are beginning to take shape but will take time to deliver results.“Spring 2027 will be the first time we see the fruits of those teams working together,” he said.While the company is making progress in certain regions, analysts say the pace of recovery will depend on stabilising demand in China and successfully managing inventory and margins in the coming quarters.The post Nike shares sink as weak outlook and China slump hit recovery appeared first on Invezz</div>

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Nike shares fell nearly 9% in after-hours trading following a warning of a 2-4% revenue decline for the current quarter, primarily due to a projected 20% drop in sales in China. Despite reporting quarterly revenue of $11.3 billion, which exceeded expectations, net income fell to $520 million. The company is facing challenges with excess inventory and has initiated cost-cutting measures, including job reductions. Analysts express concerns over the slow recovery and the impact of ongoing demand softness in China.