Shares of Topsports International, a distributor of brands including Nike and Adidas, are on track for their worst week in years, dragged down by concerns about a possible strategy shift at Nike amid efforts to turn around flagging sales.
The stock slumped 12% to 1.80 Hong Kong dollars, equivalent to 23 U.S. cents, Friday afternoon. Trading was halted on Thursday after shares slid 15% the previous session.
Friday's decline came despite the Chinese sportswear retailer addressing concerns about Nike's strategy in China, where the U.S. sneaker company has experienced sales declines for seven straight quarters. Local media earlier reported that Nike might cancel Chinese distributors' rights to sell its products on Chinese e-commerce platforms from 2027, citing unnamed sources.
In a Hong Kong exchange filing late Thursday, Topsports said it hasn't received any official notice from Nike to terminate its mainland China online distribution agreement with the company.
Topsports said the companies have regularly reviewed their business cooperation, including online sales arrangements. Online sales of Nike products accounted for about 22% of Topsports' total revenue for the fiscal year ended February, according to the Chinese retailer.
In a separate operational update, Topsports said it recorded a low-teens drop in total retail and wholesale sales in the first quarter ended May compared with a year earlier. That worsened from the low-single-digit decline it registered in its fourth quarter.
Nike didn't immediately respond to an email seeking comment about its China strategy sent outside U.S. working hours.
Citi analysts said the market reaction appeared "overdone," given that Nike hasn't given Topsports official notice on the matter.
Jefferies, which conducted checks focusing on Nike's order book, said it observed the U.S. company proactively destocking its distributors in China. "We expect Nike's Autumn/Winter 2026 shipments to distributors like Topsports and Pou Sheng to be slightly lower than the distributors' orders," its analysts wrote in a note.
Nike's China sales have been under pressure, partly due to competition from domestic upstart brands such as Anta Sports Products and Li Ning. Nike's finance chief, Matt Friend, said earlier this year that the company was shipping fewer products to China so it wouldn't have to sell at a discount.
Write to Tracy Qu at tracy.qu@wsj.com
(END) Dow Jones Newswires
June 26, 2026 03:38 ET (07:38 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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