Key Takeaways
- JD Sports shares declined approximately 2% following Nike’s disappointing earnings forecast
- Nike reported flat fiscal Q4 revenue with a 1% decrease and projected additional declines through H1 fiscal 2027
- China market sales plummeted 17% on a constant-currency basis, deteriorating from the previous quarter’s -10%
- Despite revenue concerns, Nike exceeded EPS expectations: 20 cents adjusted versus 13 cents forecasted
- Nike shares have plunged 35% in 2025 and dropped an additional 3% during Wednesday’s premarket session
Shares of JD Sports experienced a decline of approximately 2% on Wednesday following a disappointing outlook from Nike, one of the retailer’s most significant brand suppliers.
The sportswear giant revealed a 1% revenue contraction for its fiscal fourth quarter and cautioned that additional declines are anticipated during the initial six months of fiscal 2027. This announcement prompted selling pressure on JD Sports shares at the London Stock Exchange, where the company trades under the ticker symbol JD.
Nike’s shares tumbled 3% during Wednesday’s premarket hours. The stock has surrendered roughly 35% of its value throughout the current year.
The better-than-expected earnings performance failed to improve investor confidence. Nike delivered adjusted earnings of 20 cents per share, significantly surpassing the analyst consensus of 13 cents according to LSEG data. However, market participants remained fixated on revenue performance, which continues to present challenges.
CEO Elliott Hill assumed leadership close to two years ago with a clear objective to revitalize the company. Thus far, market participants remain skeptical about the pace of the turnaround strategy.
Chinese Market Presents Persistent Challenge
The Greater China region emerged once again as the weakest performing area. Regional sales contracted 17% on a constant-currency basis during Q4, representing a more severe downturn compared to the 10% decline registered in the preceding quarter.
Although Nike had initially projected a 20% decrease, the actual results marginally exceeded those lowered expectations. Nevertheless, that represents a modest achievement.
The region continues to surrender market share to homegrown Chinese athletic brands, which have been capturing increased consumer attention domestically. Greater China accounts for approximately 15% of Nike’s total annual revenue and represents its third-largest global market.
Inventory positions remain uncomfortably high, while competitive pressures show no indication of subsiding. This combination creates one of Nike’s most significant near-term strategic challenges.
North American Market Provides Positive Signs
North America delivered more encouraging results, with revenue advancing 3% during the quarter. This improvement stems from Nike reestablishing wholesale partnerships that were diminished under previous CEO John Donahoe, who had aggressively pivoted the business toward direct-to-consumer distribution.
Reversing that strategic direction has required considerable time and resources, but the Q4 North American performance indicates some progress is materializing.
Nevertheless, the comprehensive outlook remains uncertain. Revenue continues declining, the China business is weakening sequentially, and leadership is forecasting continued challenges through at least the first half of the upcoming fiscal year.
JD Sports, which maintains substantial dependency on Nike products throughout its retail locations, immediately absorbed the negative impact. The 2% stock decline on Wednesday demonstrates how intimately connected its performance is to Nike’s recovery trajectory.
Nike’s adjusted EPS of 20 cents per share for Q4 exceeded the 13-cent consensus projection, according to LSEG data.
