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Nike Faces Investor Concerns as Turnaround Efforts Show Mixed Progress

Q3 2025 earnings exceeded expectations, but challenges such as declining China sales, digital struggles, and tariff impacts weigh on recovery outlook.

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Two women walk past a Nike store featuring its large illuminated swoosh logo and interior displays of sportswear and accessories on January 18, 2025 in Chongqing, China.
Nike sneakers are seen on display at the newly renovated JD Sports store at Westfield Stratford City in London, Britain, July 30. REUTERS/Mina Kim/File Photo
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Overview

  • Nike reported Q3 2025 revenue of $11.27 billion, a 9% year-over-year decline, but surpassed analyst expectations of $11.01 billion.
  • Earnings per share reached $0.54, nearly doubling estimates, while gross margins fell 330 basis points to 41.5%, reflecting inventory liquidation and tariff pressures.
  • Sales in Greater China dropped 17%, with digital sales down 15%, highlighting regional and operational difficulties.
  • The company expects Q4 revenue to decline in the low end of the mid-teens range, further dampening investor confidence and leading to a 7% drop in stock price.
  • CEO Elliott Hill emphasized progress under the 'Win Now' strategy but acknowledged that a full recovery may take multiple quarters, with stabilization projected no earlier than fiscal 2026.