Nike’s latest results dragged JD Sports stock down roughly 2% on Wednesday, as investors digested a cautious outlook from one of the retailer’s biggest brand partners.
Nike reported a 1% decline in fiscal fourth-quarter revenue and warned that sales would fall further in the first half of fiscal 2027. That was enough to send JD Sports lower on the London Stock Exchange, where it trades under the ticker JD.
Nike’s own stock fell 3% in premarket trading Wednesday. It has now lost around 35% of its value since the start of the year.
The earnings beat did little to lift sentiment. Nike posted adjusted earnings of 20 cents per share, well above analyst estimates of 13 cents per LSEG data. But investors were focused on the top-line story, and that story isn’t great.
CEO Elliott Hill took over nearly two years ago with a mandate to turn the business around. So far, the market isn’t convinced the plan is working fast enough.
Greater China was again the weakest spot. Sales in the region dropped 17% on a constant-currency basis in Q4, a steeper decline than the 10% fall recorded in the previous quarter.
Nike had actually forecast a 20% drop, so the result was slightly better than feared. But that’s a low bar.
The region continues to lose ground to domestic Chinese brands, which have been gaining traction with local consumers. Greater China makes up around 15% of Nike’s annual revenue and is its third-largest market globally.
Inventory levels remain elevated, and competition shows no sign of easing. That combination makes the China outlook one of the harder near-term problems for Nike to solve.
North America was a brighter spot, with revenue rising 3% in the quarter. That improvement is being driven by Nike rebuilding wholesale relationships that were scaled back under former CEO John Donahoe, who had pushed the business hard toward direct-to-consumer channels.
Reversing that strategy has taken time and effort, but the Q4 North America numbers suggest some of that work is starting to pay off.
Still, the overall picture remains mixed. Revenue is declining, the China business is deteriorating quarter over quarter, and management is guiding for more of the same through at least the first half of next fiscal year.
JD Sports, which relies heavily on Nike product across its stores, felt the knock-on effect quickly. The 2% drop in its stock on Wednesday reflects how closely tied its fortunes are to Nike’s recovery timeline.
Nike’s adjusted EPS of 20 cents per share for Q4 beat the 13-cent consensus estimate, according to LSEG data.
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