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Nike Shares Sink as Weak Outlook Undercuts Q3 Beat

The outlook suggests a longer road to a rebound driven by tariff costs plus China weakness.

Nike logo is seen in a shop in Rome, Italy, March 30, 2016. REUTERS/Max Rossi
SHENZHEN, CHINA - APRIL 12: Pedestrians walk past a large Nike flagship store on a rainy day, with reflections on the wet pavement and illuminated brand signage on the glass facade, on April 12, 2025 in Shenzhen, China. China has imposed a new round of retaliatory tariffs on U.S. imports, raising duties to 125% in response to the latest escalation by the United States, which increased tariffs on Chinese goods to 145%. The growing trade tensions have further impacted China's export sector, affecting key industries such as logistics, manufacturing, and cross-border e-commerce. The measures are part of Beijing's broader strategy to counter rising economic pressure and defend its trade interests. (Photo by Cheng Xin/Getty Images)

Overview

  • Nike shares slid as much as 13% on Wednesday following Tuesday night's results, touching an 11-year low.
  • Nike guided fourth-quarter revenue down 2% to 4% and now expects a low single-digit sales decline for the year, with Greater China projected to drop about 20% next quarter.
  • The company beat estimates with roughly $11.3 billion in Q3 revenue and $0.35 EPS, though net income fell 35% from a year earlier.
  • Gross margin contracted 130 basis points to 40.2% as higher North American tariffs raised costs, with leaders pointing to potential relief after the start of fiscal 2027.
  • Wholesale partner sales rose 5% as Nike rebalances toward retailers, while Nike Direct fell 4%, and CEO Elliott Hill said the turnaround is taking longer as inventory cleanup, restructuring, and analyst timelines now stretch into fiscal 2027.