Nike Stock Hits 11-Year Low on China Weakness
Nike stock hit an 11-year low after fiscal 2026 showed sharp Greater China and digital sales declines and a JPMorgan downgrade, pressuring positions.
KEY TAKEAWAYS
- Fiscal 2026 Greater China revenue was $5.9 billion, down 11.0% year-over-year.
- Nike Direct fell 6.0% to $17.7 billion while wholesale rose 6.0% to $27.5 billion.
- JPMorgan's Aug. 4 downgrade to underweight with a $40 target intensified selling pressure.
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Nike (NKE) shares fell on Aug. 17, 2026, as ongoing weakness in Greater China and declines in direct-to-consumer and digital sales, combined with a recent JPMorgan downgrade, deepened investor doubts about CEO Elliott Hill’s multi-year turnaround plan.
China and Digital Sales Decline
Nike’s fiscal 2026 filings showed Greater China revenue totaled $5.9 billion, about 12.6% of company revenue, declining 11.0% year-over-year and 13.0% on a currency-neutral basis. Direct digital sales in the region plunged 29.0% year-over-year. Greater China earnings before interest and tax (EBIT) fell 20.0% to $1.3 billion, while footwear unit sales dropped 14.0%. These declines made Greater China the main geographic drag on Nike’s results and raised questions about restoring demand and full-price selling in a key growth market.
Turnaround Challenges and Analyst Downgrade
Nike’s fiscal 2026 results revealed a split across channels. Nike Brand wholesale revenue rose 6.0% to $27.5 billion, but Nike Direct, which includes company-owned stores and digital sales, fell 6.0% to $17.7 billion. Nike Brand digital revenue declined 12.0%. The results also included a tariff refund of about $986 million that significantly boosted gross margin, an accounting gain analysts said masked weak underlying demand. Hill acknowledged in earnings commentary that results “aren’t there yet.”
On Aug. 4, JPMorgan downgraded Nike to underweight/Sell with a $40 price target, citing persistent China weakness and underperformance in direct-to-consumer channels. The downgrade intensified selling pressure amid broader sector caution. Market commentary noted the recent share decline extended existing concerns rather than responding to new company disclosures.
Management projected first-quarter revenue to decline by a low- to mid-single-digit percentage, reflecting ongoing headwinds from inventory clearance and repositioning efforts in Greater China and efforts to improve full-price realization. Nike expects near-term revenue trends in China to remain broadly in line with recent weak performance.
