Nike Shares Tumble Despite Earnings Beat as China Weakness Clouds Outlook
Nike Inc. shares fell sharply Friday after the athletic apparel giant warned of persistent headwinds in China, overshadowing better-than-expected fiscal second-quarter results. The stock dropped nearly 10%, making it one of the worst performers in the S&P 500 during a broadly positive trading session.
Revenue edged up 1% to $12.4 billion, buoyed by a 9% surge in North American sales. Yet China—a critical growth market—posted a 17% decline, with footwear sales plummeting 21%. CFO Matt Friend cautioned that Chinese challenges may persist through fiscal 2024, forecasting third-quarter revenue to decline by low-single digits against expectations of growth.
The divergence highlights Nike's reliance on Chinese consumers amid economic fragility. While cost controls drove EPS to $0.53 versus $0.38 estimates, investors punished the guidance miss—a reminder that macro pressures outweigh operational execution in today's market.
