Nike’s China Challenge Deepens as Its Turnaround Struggles to Gain Momentum
Right now, there’s a growing conversation around Nike and the challenges it continues to face in China, and the situation feels increasingly complicated. What was once expected to be a strong recovery story has instead turned into a prolonged and uneven turnaround, with progress being slower than investors and analysts had hoped.
At the heart of this issue is China, a market that has long been crucial to Nike’s global growth strategy. Over recent quarters, it has been acknowledged that sales in the region have remained under pressure. Foot traffic has been softer, inventory levels have been higher than ideal, and consumer demand has not rebounded at the pace the company originally anticipated. As a result, efforts to reset the business in Greater China have been taking longer to show meaningful results.
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Financially, this has started to weigh on confidence. Even though Nike recently reported results that beat profit expectations, overall sales were flat compared to the same period last year. That flat performance sent a clear signal: the turnaround is far from complete. Operating margins were also squeezed, and this was largely attributed to higher tariffs, inventory clean-up costs, and continued discounting in weaker regions like China. These pressures were reflected almost immediately in the stock market, where Nike’s shares slid following the earnings release.
From management’s perspective, the company is said to be in the “middle innings” of its recovery. While North America has been performing relatively well, other international markets have not kept pace. China, in particular, has been described as a work in progress. Stores are being refreshed, product assortments are being rebalanced, and older inventory is being cleared out to protect the brand’s premium image. All of this is necessary, but it has come at a short-term cost.
Still, the reality is that patience is being tested. Investors are watching closely to see whether the China reset can finally gain traction and whether margin pressures will ease in the coming quarters. For now, the message is clear: Nike’s turnaround is not broken, but it is moving slower than expected, and China remains the biggest question mark hanging over the brand’s global recovery story.
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