Nike Inc. shares tumbled more than 14% Wednesday, plunging as low as $45.19 intraday after the athletic giant issued a disappointing sales forecast for the current quarter despite beating Wall Street expectations for its fiscal third quarter.

The stock traded around $45.28 midday, down roughly $7.57 or 14.32% from Tuesday’s close, on heavy volume exceeding 49 million shares in the first hours of trading. The sharp decline pushed Nike shares to levels not seen in nearly nine years and extended year-to-date losses to about 29%, with the stock now down roughly 66% over the past five years.

Investors reacted harshly to Nike’s projection that revenue in the fiscal fourth quarter ending May 2026 would fall 2% to 4%, missing consensus estimates that called for a modest 1.9% increase. Executives also flagged an expected 20% sales drop in the key China market during the period, compounding concerns about the pace of the company’s ongoing turnaround under CEO Elliott Hill.

“This quarter we took meaningful actions to improve the health and quality of our business,” Chief Financial Officer Matt Friend said on the earnings call Tuesday. “We delivered third-quarter results in line with our expectations, and our teams continue to execute with discipline.” Yet the forward-looking comments overshadowed the beat, sending the stock sharply lower in after-hours trading Tuesday and accelerating the sell-off Wednesday.

Q3 Results: Beat on Top and Bottom Lines, But Margins Under Pressure

For the quarter ended Feb. 28, Nike reported revenue of $11.3 billion, flat on a reported basis and down 3% on a currency-neutral basis, slightly ahead of the $11.24 billion Wall Street anticipated. Earnings per share came in at 35 cents, topping the 28-to-30-cent consensus forecast despite a 35% year-over-year decline. Net income fell 35% to about $500 million.

Gross margin contracted 130 basis points to 40.2%, hurt in part by 300 basis points of higher tariffs in North America. Nike Direct sales declined 7%, with digital down 9% and stores down 5%, while wholesale edged up 1%. Running remained a bright spot, helping offset softness elsewhere.

The company highlighted progress on its “Win Now” actions, including marketplace cleanup by pulling some “unhealthy” classic footwear styles — a move that created roughly a five-percentage-point headwind to revenue. Executives said they aim to complete these efforts by year-end to set up stronger growth ahead.

Challenges Mount: China Weakness, Tariffs and Slow Recovery

Nike’s struggles in China have become a major drag. The world’s second-largest market for the brand faces intense local competition, shifting consumer preferences and broader economic softness. The projected 20% decline in the current quarter underscores how quickly conditions have deteriorated there.

Tariffs added another layer of pain. Higher duties on imports from key manufacturing countries like Vietnam, Indonesia and China squeezed margins and raised costs by hundreds of millions of dollars. Broader geopolitical tensions and potential reciprocal tariffs announced earlier in the year have kept pressure on the supply chain.

The turnaround story, which gained traction when Hill returned as CEO in late 2024, has taken longer than many hoped. Nike has focused on elevating product innovation, streamlining inventory, reducing reliance on heavy promotions and strengthening its direct-to-consumer channels. While these steps have improved brand health in some areas, revenue has remained flat to slightly down for multiple quarters.

Analysts noted the guidance reset signals the recovery could stretch well into 2027 or beyond. “The deliberate actions to clean up the business are necessary but are clearly weighing on near-term results,” one retail watcher said. Wall Street consensus price targets still sit well above current levels — around $75 on average — but several firms have grown more cautious in recent weeks.

Market Reaction and Investor Sentiment

The 14% drop Wednesday marked one of Nike’s worst single-day performances in years and amplified frustration among long-term holders. The stock has now declined for four straight years, raising questions about whether 2026 will finally mark an inflection point.

Some value-oriented investors viewed the sell-off as an opportunity, pointing to Nike’s still-dominant brand, massive global reach and consistent dividend — recently declared at 41 cents per share, payable April 1. The forward price-to-earnings ratio hovers in the low 20s, below historical averages for the company.

Others remained wary. “Investors are losing patience with the turnaround timeline,” a portfolio manager told reporters. “Beats on the quarter are nice, but without clearer signs of accelerating growth, the stock will stay under pressure.”

Social media and trading forums lit up with debate. Posts ranged from calls to buy the dip to warnings that Nike could test even lower levels if macro conditions worsen. Options activity showed elevated implied volatility, reflecting uncertainty heading into the rest of the year.

Broader Industry Context

Nike’s woes reflect challenges facing much of the athletic apparel sector. Competitors like Adidas and Under Armour have also navigated inventory gluts, shifting fashion trends away from bulky sneakers and rising costs. Consumers, particularly younger buyers, have grown more selective amid inflation fatigue and economic uncertainty.

At the same time, Nike retains significant advantages: unparalleled marketing muscle, deep athlete partnerships and a pipeline of innovation that includes advanced footwear technology and sustainability initiatives. Running and basketball categories continue to show resilience, while the company invests in women’s products and lifestyle extensions.

Executives expressed confidence that once the “Win Now” cleanup concludes, Nike can return to low-single-digit to mid-single-digit growth with expanding margins. Full-year 2026 guidance remains muted, however, with revenue expected to stay in the low single digits at best.

What’s Next for Nike

Attention now turns to execution in the fourth quarter and updates on the “Win Now” progress. Nike plans to provide more color on its long-term strategy in coming months, including potential new product launches and marketing campaigns aimed at reigniting consumer excitement.

For investors, key questions include:

• How quickly can China stabilize?
• Will tariff impacts ease or worsen under evolving trade policies?
• Can gross margins rebound as inventory normalizes and promotional activity eases?
• Will direct-to-consumer momentum return once wholesale channels stabilize?

Retail analysts recommend monitoring same-store sales trends, inventory levels and regional breakdowns in future reports. Dividend yield has risen with the stock’s decline, offering some income support for patient holders.

Nike remains headquartered in Beaverton, Oregon, with operations spanning design, manufacturing partnerships and retail worldwide. The company employs tens of thousands and sponsors countless athletes and teams globally.

As trading continued Wednesday, the sell-off appeared broad-based with no major rebound in sight. Volume stayed elevated as traders digested the implications for the rest of 2026.

Whether this marks a capitulation low or another leg down will depend on Nike’s ability to translate operational improvements into visible top-line momentum. For now, the iconic swoosh faces a tough stretch as it fights to restore investor confidence in its comeback story.

“Estate agents are having to employ fewer people because they can’t afford them alongside their fees to Rightmove,” said Newman, who is also a former Competition and Markets Authority (CMA) panel member. “As a result, their services can’t be as effective.”

A new investigation by Congress detailed how China is buying sanctioned oil from rogue regimes around the world at a discount.

The House Select Committee on China released its report on how China is evading sanctions to purchase tens of millions of barrels of oil from countries like Iran, Russia and Venezuela that are the subject of U.S. sanctions, using a “shadow fleet” of tankers to transport sanctioned oil.

It found that sanctioned oil accounted for one-fifth of China’s total oil imports after the country became the buyer of last resort for those rogue regimes, which allowed it to stockpile a large strategic reserve of oil while buying at below market rates.

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Selling oil is a key component of the economies of Iran, Russia and Venezuela, and the report noted that energy exports yielded roughly $120 billion in revenue for Russia in 2024, about 30% of its total revenue.

Iran’s oil revenue is projected at more than $50 billion in 2025, which represents about 35% of its budget. Similarly, crude oil sales were Venezuela’s main source of hard currency.

China has been a key consumer of sanctioned oil from countries like Iran, Russia and Venezuela. (Reuters)

“From this sanctioned crude, China assembled a massive strategic petroleum reserve – roughly 1.2 billion barrels by early 2026, equal to approximately 109 days of seaborne import cover – at well below market cost from the very barrels Western sanctions were designed to strand,” the committee wrote.

The select committee said China relies on foreign suppliers for about 70% of its oil, much of which is delivered by sea routes that could be blockaded by U.S. and allied naval forces during a crisis, such as one stemming from a Taiwan contingency. That vulnerability prompted Chinese leaders to declare energy security an “urgent requirement in great-power competition” and build its massive reserve.

The report detailed how China uses a shadow fleet of tankers, which are generally older tankers that operate through opaque ownership structures under foreign flags with non-Western insurance that allow them to avoid complying with Western maritime laws. 

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China has built a substantial oil reserve in part through shipments conveyed by shadow fleet tankers. (Stefan Sauer/picture alliance via Getty Images)

The panel cited data from commodity data and analytics firm Kpler, which tracks vessel movements and trade patterns using satellite imagery, that found shadow fleet and sanctioned tankers moved about 10.3 million barrels of crude oil per day last year, with about one-third going to China. 

Additionally, it moved 2.2 million barrels per day of heavy refined products like fuel oil and crude residuals, with China receiving about 10.3%; while China also received about 45.8% of the shadow fleet’s chemical and biological cargo.

“China is the buyer of oil from desperate, rogue regimes through illicit, hard-to-track channels involving shell companies, Chinese refineries and a shadow fleet of oil tankers,” said Select Committee on China Chairman John Moolenaar, R-Mich. 

“This investigation brings to light key information on how the Chinese Communist Party keeps the economies of Iran and Russia afloat while fueling its own authoritarian agenda.”

US WEIGHS ASKING CHINA TO CURB RUSSIAN, IRANIAN OIL PURCHASES

Chinese President Xi Jinping and Russian President Vladimir Putin have deepened the relationship between the two countries, with the energy trade a key component of their partnership. (Contributor/Getty Images)

China’s oil sources have been under pressure after U.S. action to detain Venezuelan leader Nicolás Maduro and enforcement activities targeting Venezuelan oil, as well as the war in Iran, which has slowed the flow of oil tankers through the Strait of Hormuz. 

Before the war, China imported 3.4 million barrels per day of oil from Gulf producers via the Strait. While Iran’s shadow fleet continues to make deliveries at near pre-war levels, shipments from other countries in the region have slowed to a halt, prompting China to ban fuel exports and raise retail prices to mitigate the impact of the oil disruption.

The committee’s investigation led to several policy recommendations for lawmakers to consider as they look to counter the flow of sanctioned oil that benefits rogue regimes.

Those suggestions include authorizing sanctions on ports, terminal operators and similar businesses that receive cargo transported by shadow fleet vessels and establishing a whistleblower reward program for reporting sanctions evasion – particularly in transshipment hubs like Singapore, Hong Kong, Malaysia and Dubai.

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They also include having financial regulators probe potential commodity market manipulation and transactions by entities involved in systematically purchasing and routing steeply discounted Russian crude by foreign refiners.

The panel also called for creating a contingency framework with major oil producers like Saudi Arabia, the UAE and Iraq to expand supply because sustained lower prices would reduce the discount available on sanctioned crude oil from Iran and Russia.