At a recently held analyst conference call, U.S. sportswear giant Nike’s President and Chief Executive Officer Elliott Hill outlined the company’s strategy for the Greater China market in three key points: returning to a growth trajectory, becoming more premium, and putting sport first.
He further explained that achieving a “more premium” positioning requires ongoing efforts to streamline and elevate the retail landscape, as well as investment in upgrading both online and offline store formats to deliver a consistent consumer experience.
Luxe.CO observed that Executive Vice President and Chief Financial Officer Matthew Friend disclosed during the call that Nike’s flagship store in China — the House of Innovation in Shanghai — recorded double-digit growth this quarter. Meanwhile, a newly opened ACG (outdoor line) store in Nanjing also achieved double-digit growth. These two comprehensively upgraded stores in China reflect the initial effectiveness of Nike’s premiumisation strategy.
Elliott Hill stated that “China is currently our second-largest market and will remain so over the next three to five years. Our commitment to serving Chinese consumers will not change, and we will achieve this through sport. I believe the key to the Chinese market lies in three things: we must return to growth, we must become more premium and more connected to local culture, and we must put sport first.”
He added that current measures are still insufficient. He noted that “we know this is not enough. We will take further actions to reimagine this market. First, we need to make it easier for consumers to find us, and we also need stronger connections to local culture. We are repositioning the brand as a premium brand. To do this, we need to continue cleaning up and elevating the marketplace, and invest in upgrading the image of both online and offline stores to deliver a consistent experience for consumers.”
—— Building and expanding a local product innovation team in Greater China
Regarding the development of localised products, Elliott Hill provided a specific timeline:
He said that “we know that success in the Chinese market requires deep local partnerships. We have already established and are expanding a local product innovation team in Greater China, which will launch products designed, developed, and manufactured locally by the 2027 holiday season. This work is currently led by Cathy Sparks, and I have full confidence in her and her team. We have a clear diagnosis, a defined plan, and we are accelerating execution. Overall, we are satisfied with the progress we are making in the Chinese market.”
*In January this year, Angela Dong, Chairwoman and CEO of Greater China, departed the company. Cathy Sparks succeeded her as Vice President and General Manager of Greater China, effective March 31.
Based on this timeline, it will take more than a year from team formation to the actual launch of localised products.
—— Full-price sales mix rebounds, Shanghai flagship store achieves double-digit growth
In fiscal year 2026 (ending May 31, 2026), Nike’s revenue in Greater China reached USD 5.847 billion, down approximately 22% from the peak of USD 7.545 billion in fiscal year 2024. During the same period, EBIT (earnings before interest and taxes) declined from USD 2.309 billion to USD 1.278 billion, a drop of 45%.
In the fourth quarter (March–May 2026), revenue in Greater China decreased by 17% year-on-year (on a constant currency basis) to USD 1.297 billion. By channel, NIKE Direct revenue fell 14%, including a 25% decline in digital channels and a 9% decline in owned stores; wholesale revenue declined 19%, a steeper drop than in owned retail.
Matthew Friend added further operational insights on Greater China. He said that “as Elliott mentioned, a number of changes are underway in Greater China, and the team is continuing to execute against the plan. Since the beginning of the quarter, sell-through has improved sequentially, and average retail discounts have decreased. In digital, after more aggressive promotional pullbacks over the past two quarters, we are seeing a recovery in the full-price sales mix, and this trend is also evident on our partners’ digital platforms.”
He highlighted the company’s premium stores in China. He noted that “our most representative retail store — the House of Innovation in Shanghai — delivered double-digit growth this quarter, reflecting the impact of elevating the store experience and focusing on sport. In the stores we are reshaping together with our partners, we have also seen solid comparable performance for multiple consecutive quarters. Our newly opened ACG store in Nanjing has also delivered encouraging initial results.”
Inventory levels are also improving in tandem. He stated that “this quarter, both inventory value and unit count declined by double digits. We continue to work with our partners to clear aged inventory in the marketplace. Looking ahead, we expect revenue trends in Greater China to remain consistent with recent performance, and we continue to believe that profitability in this market will bottom out ahead of revenue.”
Luxe. CO’s review of Nike’s official financial reports over the past four full fiscal years shows that the revenue decline in Greater China began in fiscal year 2025. Prior to that, in fiscal year 2024, the region still achieved 4% growth (or 8% on a constant currency basis). However, the turning point for profitability came earlier. In fiscal year 2024, operating margin in Greater China had already declined from 31.5% in fiscal year 2023 to 30.6%. In other words, margins had begun to contract even while revenue was still growing. Over the subsequent two fiscal years, the margin further declined to 24.3% in fiscal year 2025 and 21.9% in fiscal year 2026, representing a cumulative contraction of 9.6 percentage points over four years.
The 19% decline in wholesale revenue broadly aligns with management’s focus on inventory adjustment, as both inventory value and unit count in Greater China declined by double digits this quarter.
—— Double-digit growth in running and football
When asked about execution details, Elliott Hill cited two categories as examples. On running, he said that “in Greater China, the running business delivered mid-single-digit growth this quarter. We had a strong launch of the Pegasus 42. The team did not rely solely on digital channels, but sold through approximately 2,000 physical stores and significantly enhanced product presentation. This is exactly the direction we will continue to strengthen.”
On football, he said that “our global football business delivered double-digit growth. We launched Mercurial, and both our digital storytelling and in-store presentation performed well. The team is also allocating resources to specific cities and regions, directly connecting with local consumers, which is equally critical to our success in this market. Our After Dark Tour running events are also progressing, and we have established a partnership with the Chinese High School Basketball League, which includes 600 teams.”
| Source: Nike official financial reports, analyst conference call
| Image Credit: Nike official website
| Editor: Luxeplace
