NIKE Inc. NKE is showing early signs of improvement in Greater China, but the market remains one of the biggest challenges in its broader turnaround. Fourth-quarter fiscal 2026 revenues in Greater China declined 17% year over year, with NIKE Direct down 14%, Digital falling 25%, and wholesale revenues decreasing 19%. EBIT also dropped 20%. Still, management pointed to sequentially better in-season sell-through, lower average retail discounts and improving full-price realization on digital following aggressive promotional reductions over the past two quarters.
NIKE is beginning to see traction where it has emphasized sport and elevated retail experiences. Running revenues increased mid-single digits, while Global Football and Tennis grew double digits. The Shanghai House of Innovation delivered double-digit growth, while recently reset retail doors also registered sales gains. NIKE is investing further in premium online and offline storefronts, deeper local partnerships and territory-level consumer engagement. Its Greater China product-creation team is also expected to deliver locally designed, developed and manufactured products beginning in holiday 2027.
However, the numbers suggest that China’s recovery is still at an early stage rather than fully established. NIKE continues to reduce inventory and clean up aged merchandise, with Greater China inventory and units both down double digits in the quarter. Management expects near-term revenue trends to remain broadly in line with recent performance, signaling that a meaningful sales rebound may take time. While improving full-price sales, stronger performance categories and better results at elevated doors offer positive indicators, sustained recovery will depend on whether NIKE can translate its marketplace reset and more locally relevant strategy into broader demand growth.
How Are adidas & lululemon Navigating China’s Market?
adidas AG ADDYY and lululemon athletica inc. LULU are NKE’s key competitors in the global market.
ADDYY is displaying much stronger momentum in Greater China, suggesting that the market has evolved into an important growth engine for the company. In second-quarter 2026, currency-neutral revenues in Greater China increased 15% year over year, following 17% growth in the first quarter. For the first half, sales advanced 16%, reflecting continued market-share gains. adidas is benefiting from strong consumer demand, improved product sell-through and a greater emphasis on locally relevant offerings. The company’s localized product strategy, including designs developed for Chinese consumers, is also helping strengthen brand appeal. With DTC sales growing at double-digit rates across markets and adidas maintaining its focus on full-price selling, China currently represents a notably healthier growth story than NIKE’s ongoing marketplace reset.
Meanwhile, LULU is seeing a more mixed picture in China after previously generating robust growth. China Mainland revenues increased 4% year over year in second-quarter fiscal 2026 on a reported basis but declined 2% in constant dollars. Comparable sales fell 2% reported and 8% on a constant-dollar basis, marking a sharp slowdown from the first quarter, when China Mainland comparable sales had risen 13% in constant dollars. The moderation suggests that China remains an important international opportunity for lululemon, but recent demand trends have become less supportive. With the Americas also under pressure, renewed momentum in China would be particularly important for sustaining the company’s international growth trajectory.
NKE’s Price Performance, Valuation & Estimates
Shares of NIKE have lost 11.2% in the past three months compared with the industry’s decline of 11.1%.
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From a valuation standpoint, NKE trades at a forward 12-month price-to-earnings ratio of 20.17X compared with the industry’s average of 17.78X.
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The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year decline of 30.1%, while that for fiscal 2027 indicates growth of 24.6%. The company’s EPS estimates for fiscal 2026 and 2027 have been stable in the past 30 days.
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NIKE stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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NIKE, Inc. (NKE): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).