Business
Nike Stock Plunges 14% on Weak Outlook as China Slump and Tariffs Cloud Turnaround Hopes
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.
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Bitcoin retreats to $73K, but ETF inflows and shrinking exchange reserves keep bulls hopeful
In the past 24 hours, Bitcoin and Ethereum were up 0.1% and 0.4% respectively. Among the major altcoins, BNB, XRP, Solana, Dogecoin, Hyperliquid and Cardano gained up to 6% whereas Tron went down nearly 2%.
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Piyush Walke, Derivatives Research Analyst, Delta Exchange said institutional appetite for Bitcoin exposure appears to be cooling, with US-listed spot Bitcoin ETFs posting their longest run of net outflows since launch.
“After briefly touching $83,000 in May, Bitcoin failed to maintain momentum and quickly lost strength. The rejection created a bull trap, where buyers entered expecting a breakout only for the market to reverse sharply lower.”
Bitcoin turned bearish on the daily chart after losing the $74,800 support, validating a lower-high, lower-low structure and Ethereum is trading under pressure around $2,000 following the loss of support at $2,040–$2,050, Walke said.
The global crypto market capitalisation went up 0.09% to $2.48 trillion, according to CoinMarketCap.
In the past week, Bitcoin fell 1% and Ethereum was up 0.1%. Among the major altcoins, BNB, XRP, Solana, Dogecoin, Hyperliquid gained upto 20.11% whereas Tron and Cardano were down 5% and 1% respectively.
WazirX market’s desk said Bitcoin moved lower through the week, easing from around $77,004 to nearly $73,091, while holding the key $73,000 to $75,000 support zone. Although short-term technicals remained cautious, ETF inflows, long-term holder accumulation, and falling exchange reserves supported Bitcoin’s broader market structure.
Also Read | Nearing retirement and invested mostly in FDs? Expert shares diversification roadmap
It further said that Ethereum also faced pressure, slipping from around $2,096 to nearly $1,998. However, its long-term narrative was strengthened through scaling developments, clear signing, proposed native private transactions, and record-high staked ETH, reflecting confidence in Ethereum’s proof-of-stake ecosystem.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and Twitter handle.
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Nearing retirement and invested mostly in FDs? Expert shares diversification roadmap
A similar query came from Jagruti who is nearing retirement and has mostly invested in fixed deposits and sought advice on whether it was too late to diversify beyond fixed deposits and include equities in her investment portfolio.
Also Read | Smallcap valuations turn favourable as correction creates fresh opportunities: Bajaj Finserv AMC
Responding to the query, Harshvardhan Roongta said it is never too late to revisit an investment strategy. According to him, investors should not view their past decisions negatively because they were made based on the knowledge and information available at that time.
He explained that the real mistake is not a lack of awareness in the past, but failing to act after becoming aware of alternative investment options.
Roongta noted that every investment product has its own advantages and limitations, which is precisely why diversification becomes important. Fixed deposits, for instance, are primarily capital-preservation tools. Investors who place money with a well-established bank are unlikely to face significant capital loss. However, fixed deposits often struggle to generate returns that comfortably outpace inflation, particularly after taxes.
On the other hand, equity investments can be volatile and do not offer any guarantee of capital protection. However, over longer periods, equities have historically delivered returns that have the potential to beat inflation and create real wealth.
According to Roongta, a well-diversified portfolio combines both growth-oriented and capital-preserving assets. While debt instruments such as fixed deposits help protect capital and provide stability, equities can offer growth potential that helps investors maintain purchasing power over the long term.
He emphasised that there is no universal formula for deciding how much equity an investor should hold. Two investors of the same age could have very different asset allocations depending on their financial goals, income sources, risk tolerance, and overall financial situation.
For example, one retiree may feel comfortable with 20% exposure to equities and 80% in debt-oriented investments, while another may choose the opposite allocation because of different financial needs and risk appetite.
Roongta said the ideal asset allocation should be determined after evaluating an investor’s objectives, future cash-flow requirements, and comfort with market volatility. The goal is to strike a balance between generating inflation-beating returns and maintaining a level of risk that the investor can comfortably handle.
Also Read | Should senior citizens continue investing in equity mutual funds after retirement? Expert explains
He also suggested consulting a SEBI-registered investment adviser to create a customised financial plan. Such advisers can help investors assess their risk profile and determine the appropriate allocation across equities, debt, gold, silver, and other asset classes.
According to Roongta, a professional review can help ensure that an investor’s portfolio remains aligned with retirement goals while also providing the diversification needed to navigate changing market conditions over the long term.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in along with your age, risk profile, and Twitter handle.
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11 equity mutual funds offer over 10% in May. Have you invested in any for your portfolio?
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Mahindra Manulife Mutual Fund announces launch of its SIF platform MPOWER
With MPOWER SIF, Mahindra Manulife Mutual Fund aims to address the evolving needs of investors, who are looking to complement their existing mutual funds with products that use derivatives and other tools to create different risk return outcomes.
Also Read | Smallcap valuations turn favourable as correction creates fresh opportunities: Bajaj Finserv AMC
The fund house aims to provide a client experience that seeks to meet the investors aspiration, whilst remaining true to the core premise of creating investment outcomes that are consistent and meaningful.
“The launch of MPOWER SIF is a significant step forward in expanding our product suite. As investors and their goals and aspirations evolve over time, there is a clear requirement for investment solutions that offer greater flexibility and use the entire range of tools available to deliver consistent outcomes. This approach is complemented by an investment team with extensive experience anchored by a sound risk management framework,” said Anthony Heredia, MD & CEO, Mahindra Manulife Investment Management.
Mahindra Manulife Mutual Fund intends to roll out a range of differentiated strategies under MPOWER SIF across equity, hybrid, and fixed income categories, aligned with regulatory guidelines and investor suitability.
“MPOWER SIF gives us the flexibility to design more agile and outcome-oriented portfolios by leveraging a wider investment toolkit. This platform will enable us to combine fundamental research with tactical allocation strategies, with the objective of delivering superior risk-adjusted returns across market cycles. We believe it is well suited for investors seeking a more nuanced approach to portfolio construction,” said Krishna Sanghavi, Chief Investment Officer – Equity, Mahindra Manulife Investment Management.Also Read | Should senior citizens continue investing in equity mutual funds after retirement? Expert explains
The SIF category offers strategies that go beyond conventional Mutual Funds, including long-short approaches, derivatives-based strategies, and more focused portfolio construction, catering to investors seeking a different approach to meeting their investment goals.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@timesinternet.in alongwith your age, risk profile, and Twitter handle.
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