Nike Stock 2026 Outlook: China Weakness and Recovery Signals

The China Headwind That Can’t Be Ignored

Nike pulled in $1.4 billion from China operations in Q2 2026 (ended Nov. 30, 2025), accounting for 11% of total company revenue. That’s the concerning part—while the absolute number looks solid, the trajectory tells a different story. Year-over-year sales in the region dropped 17%, signaling real demand challenges in what should be one of the world’s most attractive consumer markets.

The scale of China’s middle class makes this weakness particularly puzzling. CEO Elliott Hill acknowledged on the earnings call that China “remains one of the most powerful long-term opportunities in sport.” Yet the numbers don’t support that optimism in the short term. Compare this to Lululemon’s 46% revenue growth in China during the same period, and you see that weakness isn’t industry-wide—it’s Nike-specific.

A Stock Still Licking Its Wounds

Coming into 2026, Nike shareholders have endured a brutal year. The stock delivered a negative 21% return through December 19, 2025, while the S&P 500 managed an 18% gain. That’s a nearly 40-point performance gap. Even more striking: shares are trading 67% below their November 2021 peak, suggesting the market hasn’t yet bought into the company’s recovery narrative.

Elliott Hill’s Turnaround: What to Watch

Hill arrived at Nike just over a year ago with an aggressive “Win Now” strategy. The playbook includes wholesale relationship refreshes, product innovation pushes, and operational restructuring. By Hill’s own assessment, the business sits in the “middle innings” of this turnaround—meaning investors shouldn’t expect immediate relief.

The financial forecast reflects this reality. Consensus estimates for fiscal 2026 call for just 1% revenue growth paired with a 28% earnings-per-share decline. Translation: short-term pain is likely before any potential recovery takes hold.

Why Nike’s Brand Still Matters

The sportswear category remains intensely competitive, with established players and nimble challengers constantly jockeying for position. Nike’s saving grace is its unmatched brand equity. Decades of sophisticated marketing, global storytelling, and partnerships with elite athletes have built a moat that competitors struggle to replicate.

That brand strength can be a powerful accelerant during a turnaround. If Hill’s team executes on product innovation and captures consumer interest, Nike’s name recognition could drive faster adoption than a less-established competitor could achieve. This is the hidden leverage in Nike’s recovery story.

The Real Test Ahead

For investors watching Nike in 2026, the critical metrics are straightforward: revenue momentum and profit trajectory. Pay close attention to management commentary around consumer response to new product launches and whether China stabilizes or deteriorates further. The turnaround has begun, but success is far from guaranteed.