Nike forecasts surprise sales drop as China weakness hurts turnaround efforts
Nike forecasts a surprise drop in fourth-quarter sales due to persistent weakness in China and slow progress in clearing older inventory. The company's shares fell over 9% in extended trading after the announcement, despite beating estimates with flat revenue at $11.28 billion in the third quarter.
Nike's third-quarter results showed flat revenue at $11.28 billion, beating estimates. However, the company forecasts a 2-4% drop in fourth-quarter sales, citing weakness in China. China sales fell 10% in the third quarter, and are expected to fall 20% next quarter. Nike is working to clear old inventory, which is squeezing margins. The company's turnaround efforts are taking longer than expected, with CEO Elliott Hill preaching patience. Nike's European market saw increased promotions, which also affected margins.
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