Why is Nike stock crashing today

Nike (NYSE: NKE) delivered some rather mixed results in its fiscal Q2 2026 earnings report on Thursday, December 18, beating revenue expectations but not doing so great in terms of profitability, which has weighed heavily on the Nike stock. 

Specifically, the sportswear giant reported revenue of $12.4 billion, slightly above the $12.2 billion estimate, while net income plunged 32% year over year.

The decline was largely due to continued weakness in China, where sales slid no less than 17%, to $1.4 billion. Similarly, gross margin fell by three percentage points to 40.6%, reflecting the impact tariffs have had on the operations.

As mentioned, the Nike stock has reacted sharply, down more than 10% on the weekly chart and trading at $59.4 at the time of writing, less than twenty-four hours following the report. 

Nike stock crashes as Chinese sales drop

The sales drop in China thus dealt the heaviest blow to the net income, exposing just how important foreign markets are to the company.

In response, CEO Elliott Hill assured investors in the Nike earnings report that the management is working on ensuring long-term growth and profitability of the brand, hinting at an upcoming comeback:

“NIKE is in the middle innings of our comeback. We are making progress in the areas we prioritized first and remain confident in the actions we’re taking to drive the long-term growth and profitability of our brands,” Hill said.

Looking ahead, Nike appears to be emphasizing its “Win Now” strategy, whose next crucial step is the January launch of a new footwear platform, dubbed “Nike Mind.” 

“Fiscal 26 continues to be a year of taking action through Win Now, including realigning our teams, strengthening partner relationships, rebalancing our portfolio, and winning on the ground,” the CEO added.

Thanks to the recent decline, Nike’s market capitalization has dropped to $87.6 billion. Nonetheless, Wall Street sentiment remains broadly positive, with analysts holding a “Buy” consensus and a mean price target of $80 for the next 12 months, signaling a 36% upside as per a total of 29 aggregated ratings on TipRanks.

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