Nike Shares Plunge 14% After China Warning and Cut to Sales Outlook

Overview

• Investors drove the stock about 14% lower Wednesday after the company warned China sales could fall as much as 20% and trimmed its near-term forecast.
• For fiscal Q3, revenue was about $11.28 billion and EPS was $0.35, topping estimates, while net income fell 35% to $520 million.
• Gross margin slipped to 40.2%, down 1.3 percentage points, which the company linked to higher North American tariffs and rising operating costs.
• Wholesale rose 5% to $6.5 billion as NIKE Direct fell 4%, with digital down 9% and stores down 5% after the brand pulled back on discounts.
• Greater China revenue dropped 7% as North America grew 3%, and Converse sales fell about 35%, highlighting pressure outside Nike’s core footwear line.