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2w ago

S&P Global Cuts Nike Outlook to Negative as Turnaround Takes Time

The shift reflects eroding profits tied to tariffs alongside weakening China demand.

Nike Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Monday, March 30, 2026. Stocks rose after a rout fueled by concerns over the fallout of the war in Iran, with attractive valuations and prospects for resilient earnings luring bargain hunters.
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China weakness and tariffs are weighing on Nike’s margins, with a sharp decline in Greater China and rising costs driving profitability lower.
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Overview

  • S&P Global revised Nike’s credit outlook to negative, and several banks cut price targets, deepening the stock slide.
  • Nike guided fiscal Q4 sales down 2% to 4% after a flat Q3 with EPS down 35% to $0.35 and gross margin at 40.2%.
  • Greater China revenue fell about 20% in the quarter, hurting a region that usually carries higher margins.
  • Wholesale rose 5% to $6.5 billion as NIKE Direct fell 4% to $4.5 billion, showing the Win Now push back to retail partners.
  • The stock trades near 1.5 times sales and about 28 times forward earnings, with a 117% payout ratio stoking dividend cut worries despite $8.1 billion in cash.