Nike: weak Chinese sales undermine confidence in recovery

Nike continues to struggle in the Chinese market, while the sneaker maker is making cautious progress elsewhere. Analysts believe the brand’s comeback is proceeding at a pace of “two steps forward and one step back”.

Comeback is “not linear”

In the quarter ending 30 November, global sales rose 1% to $12.4 billion (€11.4 billion). That level is still about $1 billion (€920 million) below sales two years ago. Pressure on profitability also remains high, with gross margin falling 3 percentage points to 40.6%. Nike attributes this primarily to higher import tariffs in North America, which the company says cost $1.5 billion a year. Net profit fell by 32% in the quarter.