Nike, the U.S. sporting goods maker, is struggling to break free from a prolonged slump. Earnings for the March-May period of fiscal 2026, released June 30, showed revenue declining for the first time in four quarters due to weakness in the Chinese market. Analysts say the company's brand competitiveness is clearly weakening, as it also trails Adidas and Puma at the 2026 World Cup in North America.
The Nihon Keizai Shimbun (Nikkei) reported Wednesday that "at the ongoing World Cup in North America, Cristiano Ronaldo of Portugal's national soccer team was spotted wearing Puma sneakers before a match, drawing attention." The paper added, "Ronaldo signed a lifetime sponsorship deal with Nike worth $1 billion (about 1.55 trillion won) in 2016, and the scene of him wearing a competitor's product is seen as a symbolic example showing that the influence of the Nike brand is not what it used to be."
Nike's World Cup jersey sponsorship has also shrunk. In this tournament, Nike sponsors jerseys for 12 of the 48 participating nations (25%), a sharp drop from the 40% share it held at the previous World Cup in Qatar. In contrast, Adidas expanded its share by sponsoring 14 nations and Puma 11.
Nike shares have recently shown signs of a rebound, but remain at low levels, down about 30% from the start of the year. Nike's revenue for the March-May period of fiscal 2026 fell 1% from a year earlier to $10.972 billion (about 17.0603 trillion won). However, net profit rose fivefold to $1.069 billion (about 1.6621 trillion won) due to factors such as tariff refunds under the Trump administration, breaking a seven-quarter streak of declining net profit.
The Chinese market poses the biggest burden for Nike. Revenue in the "Greater China" region, which includes mainland China, Hong Kong and Taiwan, fell 12%. As competition with local brands ANTA and LI-NING intensifies, Nike is struggling with both brand and price competitiveness.
The North American business, by contrast, showed a recovery. North American revenue rose 3% from a year earlier, and revenue in the flagship footwear segment increased 4%. Although Nike is losing some market share to emerging brands such as Switzerland's On and France's HOKA, sales are recovering as relationships with major retailers improve.
Still, the market retains concerns about Nike's growth strategy. Swiss financial firm UBS said "there is no reason to buy Nike stock," lowering its 12-month target price to $48 (74,572 won) from $50 (about 77,640 won). The analysis is that slowing demand after the North American World Cup will lead to a decline in sales. U.S. investment bank Bank of America also lowered its target price to $47 (about 72,976 won) from $55 (about 85,448 won).
Nikkei assessed that "Nike is aiming for a recovery in the North American market and a rebound in Chinese sales, but has failed to find a decisive turning point to reverse its stock slump," adding that "the weakening presence in soccer, an area where it had shown particular strength, symbolically demonstrates the decline in brand competitiveness."
Meanwhile, Nike plans to pay employees lower-than-target bonuses this year in the aftermath of its weak earnings. Nike CEO Elliott Hill recently told employees worldwide in an internal memo, "We are paying 74% of target bonuses," adding, "This year requires a great deal of effort, and we have not yet delivered the level of performance we need to reach."
Payout rates vary by regional performance. North American employees will receive 92% of their target bonus, reflecting the recent recovery. The payout rate for employees in Greater China, where the slump continues, is 56%.
