Nike Braces for Earnings Test as China Slump and Stock Slide Deepen

Nike will report fiscal first-quarter earnings after markets close Thursday, a moment of reckoning for a company whose stock has lost more than 40% of its value this year and whose once-dominant presence in China continues to erode.

Analysts surveyed by LSEG expect the sportswear giant to post earnings of 43 cents per share on revenue of roughly $11.32 billion. Those numbers would mark another quarter of sluggish performance for a brand that has struggled to find its footing since the pandemic-era boom faded and competitors crowded into its core markets.

The company itself has tempered expectations. Former Chief Financial Officer Matt Friend told investors earlier this year that Nike anticipated “flattish” sales for the first half of fiscal 2027, a tacit acknowledgment that the turnaround effort underway since CEO Elliott Hill took the reins has yet to translate into meaningful growth. Nike has since brought in a new finance chief, David Denton, a former Pfizer executive who stepped into the CFO role in August and will now help steer the company through investor scrutiny on Thursday’s call.

China remains the company’s most glaring problem. Sales in the region fell 12% in the most recent quarter, continuing a painful retreat from a market that was once among Nike’s most profitable. Hill has publicly insisted that Nike is “fully committed” to reclaiming its footing there, but Wall Street’s patience appears to be thinning. Bank of America analysts downgraded the stock from neutral to underperform last week, warning that “risks are rising” and predicting further disappointment out of China alongside continued pressure on the share price.

North America, Nike’s largest and historically most reliable market, has also shown cracks. Last quarter’s $4.83 billion in North American revenue fell short of the $4.88 billion Wall Street had penciled in, according to StreetAccount, suggesting that even the company’s home turf is not immune to the broader slowdown in consumer appetite for sneakers and athletic apparel.

That slowdown is playing out against a tougher macroeconomic backdrop. Rising geopolitical tensions and persistent inflation have made consumers more cautious with discretionary spending, a dynamic that has weighed on Nike alongside much of the retail sector. Executives have responded with a turnaround strategy that prioritizes different segments of the business at different speeds, betting that a more disciplined, phased approach will eventually restore growth rather than chasing quick fixes.

There was at least one unusual boost buried in the company’s last report: a nearly $986 million tariff refund that added 52 cents per share to earnings, a one-time windfall that flattered results but did little to change the underlying narrative of a brand searching for relevance. Nike said it still expects gross margin for the first fiscal quarter to tick up slightly from a year earlier, a modest sign that cost discipline and pricing strategy may be gaining some traction even as top-line growth remains elusive.

Looking ahead, analysts project full-year revenue of around $45.31 billion for fiscal 2027, with the second quarter expected to come in near $11.79 billion — hardly a dramatic acceleration from current levels. For investors, Thursday’s results and the accompanying 5 p.m. ET call with analysts will be closely parsed for any signs that Hill’s turnaround plan is beginning to bear fruit, or whether Nike’s struggles in China and sluggish demand at home will continue to define the brand’s story into 2027.