Nike Inc. expects its sales to decline by a double-digit percentage in the current quarter due to ongoing restructuring efforts, tariffs, and sliding consumer confidence. The company’s guidance is worse than analysts’ expectations, with sales projected to fall at the “low end” of the “mid-teens range.”
The decline in sales is attributed to weakness in China, where sales dropped 17% in the key region to $1.73 billion, falling short of expectations. Nike’s efforts to clear out old inventory and introduce new styles are contributing to the decline in gross margin.
CEO Elliott Hill acknowledged that the company has made progress against its turnaround goals but expressed dissatisfaction with overall results. He emphasized that reigniting innovation and creating industry-leading products will be key to restoring growth.
The company’s struggles are compounded by external factors such as tariffs, volatile foreign exchange rates, and tax regulations. The new 20% tariff on goods imported from China is expected to hit Nike’s margins unless the retailer raises prices or passes on the costs to suppliers.
Despite these challenges, Hill remains optimistic about the company’s ability to reclaim market share and reset its business. New product launches, such as the Pegasus Premium and Romero 18, are expected to drive growth, and partnerships like the collaboration with Kim Kardashian’s Skims brand may help improve inroads with female consumers.
Source: https://www.cnbc.com/2025/03/20/nike-nke-q3-2025-earnings.html