Nike Shares Drop 10% as China Sales Plunge, Tariffs Hit Profits

Nike's weak performance in China has rattled investors, despite the company's fiscal second-quarter earnings and revenue topping Wall Street's expectations. The sportswear giant's shares dropped 10% after the company revealed that China sales had plunged, with tariffs hitting profits.

The company's revenue in China fell by 12% year-over-year, while its operating income in the region dropped by 18%. This decline is largely attributed to the ongoing trade tensions between the US and China, which have led to higher tariffs on imported goods.

Nike's weak performance in China has raised concerns among investors, who are worried about the company's ability to maintain its growth momentum in the region. The company's shares have been under pressure in recent months, and this latest decline is likely to exacerbate the situation.

Despite the challenges in China, Nike's overall revenue and earnings beat Wall Street's expectations. The company reported a 10% increase in revenue, driven by strong sales in North America and Europe. However, the decline in China sales and the impact of tariffs on profits have cast a shadow over the company's growth prospects.

Nike's weak performance in China is a reminder of the challenges facing the sportswear industry in the region. The ongoing trade tensions and the decline of the Chinese economy have made it increasingly difficult for companies to maintain their growth momentum in the region.

The company's shares have been under pressure in recent months, and this latest decline is likely to exacerbate the situation. Investors are likely to be watching the company's performance closely in the coming months to see if it can recover from this setback.

Sources

[1] Nike shares drop 10% as China sales plunge, tariffs hit profits