BEAVERTON, Ore. – Nike’s shares plunged as much as 10% in after-hours trading on Thursday, December 18, 2025, following the release of fiscal second-quarter results that, despite beating estimates, underscored persistent weakness in Greater China and margin pressures from tariffs. The world’s largest athletic footwear and apparel company reported a 17% revenue drop in Greater China to $1.42 billion and a 32% decline in net income to $792 million, dragging overall performance despite strength in North America.
CEO Elliott Hill, in his turnaround efforts, acknowledged slower-than-expected progress in China: “Improvements are not happening at the level or pace we need.” The region—once a growth engine—continues to face soft consumer demand, intense local competition, and promotional pressures eroding premium positioning. Wholesale revenues rose 8% globally to $7.5 billion, but direct sales fell 8% to $4.6 billion, with Converse revenues sinking 30% to $300 million.
Key Financial Highlights (Q2 Fiscal 2026)
| Metric | Reported Figure | YoY Change | vs. Estimates |
|---|---|---|---|
| Revenue | ~$12.4B | +1% (reported) | Beat |
| Greater China Revenue | $1.42B | -17% | Major drag |
| Net Income | $792M | -32% | N/A |
| Gross Margin | 40.6% | -300 bps | Tariff hit |
| EPS | $0.53 | N/A | +43% surprise |
The results reflect ongoing “Win Now” strategy costs—inventory clearance, marketing ramps (projected >$5B in 2026), and leadership realignments—while tariffs added ~$1.5B annual burden. North America provided offset with growth in running products, but investors focused on China’s drag and non-linear recovery signals.
Analysts remain mixed: Some view the beat as turnaround validation, others flag sustained China risks and margin squeeze. Shares closed around $59 pre-slump, with forward guidance implying low-single-digit global revenue decline in Q3.
In a competitive landscape favoring agile rivals, Nike’s China woes aren’t new—but persistence tests patience. As the Swoosh resets, this quarter reminds: Premium brands thrive on momentum, and regaining it in the world’s second-largest market remains the biggest hurdle.