Nike said it expects revenue to fall in the low-single digits in the quarter that began Dec. 1, reversing two straight quarters of growth as demand remains weak in China and at its Converse brand. Even so, Nike reported fiscal second-quarter earnings and revenue that topped Wall Street expectations as CEO Elliott Hill continues a turnaround effort. The update highlights a company that is still finding its footing—showing progress in some areas while facing real headwinds from China’s slowdown and tariff-related profit pressure this year.

Highlights:

• Stock reaction: Nike shares slid about 10% after the report as investors focused on the China slowdown and margin pressure, despite the earnings-and-revenue beat.
• Margins squeezed: Management pointed to shrinking margins, reflecting higher costs and the hit from tariffs that have affected retailers this year.
• Turnaround framing: Nike described its turnaround as being “in the middle innings,” signaling more execution work ahead rather than a quick fix.
• China reset: CEO Elliott Hill said the company needs a “reset” in China, underscoring that the market remains a key swing factor for results.
• Converse drag: Alongside China, continued weakness at the Converse brand was cited as a specific pressure point on the near-term outlook.

Perspectives:

• Nike management: Nike says its turnaround is progressing but still underway, describing it as being “in the middle innings” while it works through a tougher operating environment. (MarketWatch)
• Investors/market participants: The sharp post-earnings drop reflected concern that weak China demand and tariff-driven pressure could outweigh near-term beats and slow the recovery narrative. (CNBC)
• Media analysis: Coverage emphasized that Nike delivered slight sales growth overall, suggesting elements of the turnaround may be working even as China and Converse remain drags. (The New York Times)

Sources:

• Nike Warns of Sales Decline as China Weakness Persists - bloomberg.com
• Nike says turnaround plans are ‘in the middle innings,’ but investor worries remain - MarketWatch - google.com
• Nike shares fall 10% as China sales plunge, tariffs hit profits - cnbc.com
• Nike’s Struggles Continue, but Turnaround Plan May Be Working - nytimes.com
• Nike shares fall sharply as weak China sales dent faith in turnaround - ft.com
• Nike says turnaround plans are ‘in the middle innings,’ but investor worries remain - marketwatch.com