Analysis of Nike's 17% Revenue Decline in Greater China: Brand Premium Strategy Faces Challenges

According to Nike’s latest earnings report, Greater China revenue dropped to

, a 17% year-over-year decline, making it the weakest-performing market among all regions [0][1]. Meanwhile, the North American market achieved a strong 9% growth to $5.63 billion, showing obvious regional imbalance.

Nike’s current market capitalization is approximately $90 billion, with its stock price falling over 17% year-to-date. Its P/E ratio is 35.68x, the analyst consensus rating is “Buy”, and the target price is $73.5—representing a 20% upside from the current price [0].

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Over the past two decades, Nike has held dominant brand premium and pricing power in the Chinese market [1]. However, domestic brands represented by Li-Ning and Anta have formed strong competition in terms of cost-effectiveness and local cultural identity, directly diverting consumers.

Store foot traffic in Greater China has continued to decline [1], reflecting weakened consumer willingness to purchase high-priced sports goods amid the consumption downgrade trend.

Poor clearance of old inventory forced Nike to increase discount efforts, which directly eroded the brand premium space [1][3]. The Converse brand plummeted 30% in the Chinese market, further dragging down overall performance.

In recent years, Nike has strengthened its Direct-to-Consumer (DTC) strategy and reduced wholesale exposure, but this transformation places higher demands on new product momentum and supply chain turnover [3].

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Evaluation Dimension	Current Situation Analysis	Conclusion
Pricing Power	Rising discount rates forced margin compression	Short-term pressure
Brand Awareness	Deep roots in basketball and running culture	Stable brand assets
Product Innovation	Sports technology R&D and top athlete sponsorship remain core competitiveness	Moat still exists
Channel Transformation	DTC strategy theoretically improves gross margin but faces execution challenges	Transition pain period

: The brand premium has not completely failed, but . Nike’s brand assets are still solid, and product innovation and sports technology remain core moats. However, in the current consumption environment, the brand premium strategy requires more refined execution, including differentiated product portfolios and localized marketing.

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: Nike expects revenue to decline by low single digits in this quarter (starting December 1), with gross margin likely to drop by 1.75-2.25 percentage points. Tariff increases will impact gross margin by approximately 3.15 percentage points [1][2].

:

• Same-store sales growth
• E-commerce promotion performance
• Pipeline inventory days
• Discount rate changes

: The current stock price has fully reflected pessimistic expectations, but signals of improvement in China still need data verification. In the short term, observe with $60 as the benchmark; in the medium term, consider increasing positions only after the triple verification of “improved inventory quality, falling discount rates, and recovery of China sales”. Nike remains a long-term core target, but patience is required [3].

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Nike’s 17% revenue decline in Greater China is the result of the superposition of three factors:

. The brand premium strategy faces short-term challenges, but the company’s brand assets and technological moat still have long-term value. The key lies in whether Nike can achieve breakthroughs in product portfolio optimization, inventory quality improvement, and China localization strategy. Recovery is expected to be a gradual process—investors should remain patient and wait for clear signals of fundamental improvement.

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[0] Jinling API - Nike Company Profile and Financial Data

[1] Phoenix Finance - “Nike Returns to Wholesale Era: Greater China Revenue Plunges 17%, and Has to Bow to Distributors” (https://h5.ifeng.com/c/vivoArticle/v002qTaZ4QmtGF2vqlA9HihVJ69YJficzLRuEMmGkzw7ePE__?isNews=1&showComments=0)

[2] United Daily News - “Nike China Pressure Unresolved, Recovery Takes Time” (https://money.udn.com/money/story/123398/9213169)

[3] CMoney - “Nike China Pressure Unresolved, Recovery Takes Time” (https://www.cmoney.tw/notes/note-detail.aspx?nid=1066529)

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