Nike reported its fiscal 2026 second-quarter results on December 19, Beijing time. The company posted revenue of $12.4 billion, surpassing analyst expectations. Breakdowns include $4.6 billion from direct-to-consumer sales and $7.5 billion from wholesale, up 8% year-over-year. A key highlight was Nike's inventory, which declined 3% YoY to $7.7 billion, with Greater China inventories dropping by mid-teens. Revenue in Greater China reached $1.423 billion.
The earnings reflect Nike’s ongoing mid-phase strategic execution, with challenges like short-term volatility in Greater China. However, the company emphasized its commitment to long-term growth over aggressive promotions, focusing on inventory management and channel optimization. The inventory reduction marks progress, freeing space for future product launches.
Nike President and CEO Elliott Hill stated during the earnings call: "Nike’s recovery is entering a critical phase." He highlighted confidence in the "Sport Offense" strategy, which prioritizes athlete-centric innovation to drive sustainable growth and profitability. Market sentiment remains positive, with 36 out of 38 analysts covering Nike maintaining "Hold," "Overweight," or "Buy" ratings.
**Inventory Efficiency and Organizational Agility** Nike’s inventory reduction, now a multi-quarter trend, signals a shift from short-term fixes to long-term structural improvements. This "back-to-basics" approach has stabilized growth without relying on short-term stimuli. North America revenue grew 9%, with wholesale surging over 20%, validating the strategy.
Greater China remains a focal point. Hill reiterated China’s long-term potential, pledging operational optimizations. Structurally, Nike elevated regional leaders (including Greater China) to report directly to the CEO, shortening decision-making chains for faster local responsiveness.
**Sport-Led Strategy in China** Nike’s "Sport Offense" strategy aims to strengthen brand differentiation through sports. Recent marathon events—like Beijing and Shanghai—showcased Nike’s dominance, with athletes sweeping podiums and setting records. Marketing campaigns, such as Beijing’s "Haidian deserves a lesson" and Shanghai’s "No looking back," resonated deeply, reinforcing Nike’s cultural relevance.
Off-track, Nike’s localized storytelling, like the Cantonese-themed ad with sprinter Su Bingtian, broke engagement records. Retail upgrades in eight cities, including Beijing’s Han Guang store, drove a 25% sales increase in running gear by enhancing in-store experiences.
**Innovation as Core DNA** Nike consolidated innovation teams across Nike, Jordan, and Converse into a unified "athlete-centric" engine. Product launches included the Vomero Premium (running) and S.T. Glow (basketball), tailored for China’s outdoor courts.
Future-facing tech debuted at China’s Import Expo: - **Nike Mind**: Neuroscience-based footwear (Mind 001/002) launching in January, using tactile feedback to boost focus/recovery. - **Project Amplify**: Lightweight motorized shoes exploring next-gen performance gear.
While near-term pressures persist, Nike’s "Win Now" initiatives show traction. The focus remains on validating strategy execution across markets.
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