NIKE shares fell 3.6% after earnings, as steep declines in Greater China and Sportswear—and a mid-teens drop in Jordan—showed that growth in Performance is not yet enough to offset pressure elsewhere. Management also said inventory and marketplace cleanup will weigh on future order books, with benefits from its repositioning expected to take time.
- Revenue was within the company’s guided range, and gross margin improved as expected; management said results were in line with expectations.
- NIKE Performance grew at a high-single-digit rate, but the business was not large enough to offset weakness in Sportswear, Jordan Brand and Greater China.
- Sportswear, just under half of quarterly revenue, declined at a low-double-digit rate. The planned near-50% reduction in Dunk revenue created an approximately $200 million headwind, alongside weaker sell-through of some older footwear.
- Jordan Brand revenue fell at a mid-teens rate and represented 13% of global business. NIKE plans to reduce the volume and frequency of selected Retro launches, with the biggest near-term impact expected in North America.
- Greater China revenue declined 26%. NIKE is narrowing its digital distribution and working with wholesale partners to address excess inventory, actions that management said will take time to deliver their full benefit.
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