From adjustment to buildup: Nike's transformation enters a new phase

As of April 1 Beijing time, Nike released its latest quarterly earnings report for the new season. In fiscal 2026’s third quarter, the group’s revenue was $11.3 billion, overall above market expectations. Among them, revenue from Nike’s owned-and-operated business was $4.5 billion, mainly due to adjustments to Nike Brand’s digital business and owned stores business; demand creation expenses were $1.1 billion, flat year over year; the North America market business showed moderate growth, while EMEA and Greater China faced pressure.

The external environment is complex and constantly changing, and this “scorecard” shows that this global sports giant is going through a critical turning point—from “course correction and repair” to “building momentum and preparing to surge.” The overall company’s recovery progress has not been consistent across business segments, and some business lines are still waiting for the moment when they hit the bottom and rebound.

Although revenue figures are still under pressure, signs of structural improvement are clear—channel health is rebounding, momentum in core product categories is recovering, and organizational execution is strengthening. This quarter may become a “validation window” for Nike’s transformation cycle, and the path to restoring long-term profitability is becoming clearer.

From Win Now to Sports Offense: The transformation logic is becoming clearer step by step

At the end of 2024, Nike CEO John Hanfeng 贺雁峰 took office and proposed the “Win Now” plan. The focus at this stage was to repair channels and market order, including clearing inventory, improving relationships with distributors, and so on, and by rebalancing the supply-demand structure to create more stable transformation conditions for subsequent adjustments. Judging from the results, this stage is more about playing the role of “clearing and repairing,” fundamentally making room for transformation.

On this basis, in 2025 Nike further rolled out the “Sports Offense” strategy, refocusing resources once again on core sports categories such as running, basketball, football, and outdoor, and gradually rebuilding the brand’s core competitiveness and long-term momentum through product innovation and coordinated investment in sports culture.

This means that “Win Now” and “Sports Offense” respectively correspond to short-term order restoration and long-term capability building. They are not substitute relationships; rather, they connect in sequence and support each other. It is not hard to see that Nike’s goal is to restore the brand’s long-term profitability.

Hanfeng 贺雁峰 said the “Win Now” plan will continue until the end of the year. Nike’s transformation is not only focused on fixing simple issues, but on building capabilities over the longer term. Combined with Nike’s business scale and the group’s size, this kind of top-down, systematic adjustment is a major challenge that will require more time to deliver, yet it is the kind of pain Nike must bear right now.

Fortunately, overall, after the earlier adjustments, Nike’s strategic transformation has become progressively clearer, moving from direction calibration into deeper execution.

Currently, the North America market has already shown results. During the earnings period, growth of 3% continued, business momentum has been strengthening, and while it helps validate to the outside world that the strategy is working, it also injects a shot of confidence into the capital market amid earlier fluctuations.

In the conference call after the earnings disclosure, Hanfeng 贺雁峰 also said that, as of now, this strategic transformation has seen the most advanced progress on the two key dimensions: channel repair and the North America market, which is the core leverage point to achieve the company’s overall transformation.

“Three major levers”—organization, product, and channels—rebuild the competitive core

As “Win Now” progresses, Nike continues to optimize its organizational structure to improve strategic execution efficiency. In the previous quarter, Nike had already announced the compression of regional reporting layers. The heads of the four regional markets report directly to CEO Hanfeng 贺雁峰, and the outside world believes this move aims to accelerate the rollout and implementation of the global strategy in regional markets.

Within this adjustment framework, there was personnel change in the China market this fiscal quarter, as Cathy Sparks（申凯希） was appointed Group Vice President and General Manager of Greater China.

According to the introduction, Cathy Sparks has served in Nike for more than 25 years. Her career experience covers retail, DTC, and multiple complex regional markets, giving her comprehensive experience that spans from front-line operations to a global perspective.

The appointment sends multiple signals. On the one hand, it reflects Nike’s emphasis on the China market. Among all global regions, China has a large market size and a complex structure, while also offering high growth potential. Accordingly, placing a veteran manager who deeply understands Nike’s logic for transforming complex global markets into this critical position is, in itself, a strategic statement. On the other hand, it also signals that the transformation of the China market is entering an entirely new stage. Cathy Sparks is skilled at establishing new operating order in complex market environments. Her arrival will help Nike accelerate the transformation of key markets with more efficient and more refined execution capabilities.

With the China market transformation entering a new stage, the execution and deepening of the global strategy in the future will be carried out under even more localized and more refined management. Execution capability is expected to be further strengthened, accelerating the process of reshaping the market.

Regarding the China market, Hanfeng 贺雁峰 also said the Greater China region will benefit from more localized strategies in the future and closer connection with local consumers: “We have a clearer understanding of the structural challenges facing the China market and the channel dynamics in the market. Centering on sports, we are taking action to optimize the market environment, strengthen execution in online and offline retail, and drive the rebuilding of the brand in the local market.”

As a brand with decades of sports DNA, Nike knows that the true “moat” always comes from product strength itself. Today, Nike, Jordan, and Converse—the three major brands—have achieved resource interconnection and capability synergy. Through shared insights, technology interoperability, and the fusion of craftsmanship, the innovation, design, and product teams are gradually forming an integrated innovation system, accelerating the conversion efficiency from technology R&D to product launch.

This innovation system also provides support for Nike to maintain the pace of rapid product iteration in core sports categories.

In running, Nike has been continuously refining a new simplified road-shoe lineup around the real needs of runners. The new Pegasus 42 features a curve-type full-length Air Zoom cushioning unit, with energy return up 15% versus the previous generation, and is precisely suited for everyday training needs across different paces. Structure Plus combines Zoom X and React X technologies to provide more stable support beyond a soft underfoot feel. Nike is winning back the favor of the running community through clearer product tiering and more professional tech support.

In basketball, Nike uses a signature shoe lineup as the core, developing targeted products around the athletic characteristics of different types of players, strengthening product fit for real game scenarios. Nike is consolidating its brand foundation and dominance in the basketball market with a product layout that comprehensively covers players’ practical in-game needs.

In football, Nike continues to improve the performance of professional equipment through technological innovation. The new 2026 national team jersey incorporates Aero-FIT high-performance cooling technology. With an air-guiding structure, it significantly improves sweat-wicking efficiency, allowing athletes to stay dry and focused even in extreme hot-and-humid conditions—highlighting Nike’s long-term commitment to helping athletes break limits with tech innovation.

In the outdoor segment, the ACG brand refreshed and completed its update in this fiscal quarter, responding to the outdoor trend with more professional products. Across diverse scenarios, ACG drives innovation with real athlete testing and keeps refining its product matrix: ACG Pegasus Trail, ACG Zegama, and ACG Ultrafly are forming an off-road running product matrix. Meanwhile, the ACG Lava Loft down jacket that can be packed into a hand-sized form, and the Thermа-FIT Air Milano jacket, which was the first to introduce Air technology into apparel and achieved dynamic temperature control, are continuing to expand the performance boundaries of outdoor products.

In addition, this quarter Nike Mind, the Nike Mind neural mind & science series, was launched and made available globally, and supplies sold out, bringing strong momentum.

据悉，该系列产品划时代地打通足部感知与感官调动，以帮助运动员平衡身心、提升专注力聚焦于运动表现，是耐克历经超十年研发的重要科技成果，距发布至量产仅用不到6个月。

At present, more than 2 million consumers worldwide have subscribed to Nike’s website for in-stock notifications. The brand plans to meet consumer demand over the next two quarters by doubling production capacity.

When innovation no longer stays at the concept level, but is implemented into specific products and sports scenarios, market and consumer response will become more direct. This quarter, global running business grew 20%, and the driving role of professional sports categories in the business recovery has started to show. This indicates that the Sports Offense strategy is becoming a viable path for Nike to get through the adjustment period.

And while continuous iteration of innovative products ultimately still needs to be validated through terminal conversion, retail channels are one of the core touchpoints connecting the brand and consumers.

Based on earlier repair of relationships with distributors, Nike has improved product launch efficiency and channel collaboration, enabling new products to enter terminal sales floors faster. While enriching consumer choice, it also accelerates the release of product momentum.

The earnings report shows that in the quarter, distributor business grew 5%, with business revenue of $6.5 billion, indicating that the channel side has begun to support performance. Previously, Nike faced structural pressure due to excessive DTC expansion; now it appears Nike is working to restore the health of its operations, and with promising results.

On this basis, Nike is strengthening consumer participation and interactivity by organizing more sports community activities centered on stores, thereby rebuilding brand experience and reshaping connections with consumers.

In the China market, Nike, together with strategic partners such as Tmall and Baosheng, carries out offline athlete engagement events across the country. Including multiple contracted athletes and coaches such as Li Na, Guo Ailun, and Shao Jiayi, they visit store locations in cities such as Beijing, Shanghai, and Chengdu to exchange sports experience and insights face to face with consumers, and create interactions with local sports fans, effectively channeling event attention into offline consumption scenarios.

By integrating products, channels, and sports experiences, Nike is trying to transform retail space from a single sales endpoint into a comprehensive touchpoint that connects with consumers. In the long run, this adjustment is expected to provide support for the restoration of long-term profitability.

Nike’s next step: Focus on the long term and unlock potential

It is not hard to see that Nike has successfully shifted from “passive adjustment” to “active momentum building” through clear management-layer adjustments, an innovative product layout, and pragmatic channel restructuring.

The capital market generally recognizes the effectiveness of Nike’s current transformation. Among multiple analysts who have long tracked Nike, 21 have assigned “Buy/Outperform” ratings.

The key in the next stage is whether these early accumulations can be converted into stable and sustainable long-term momentum. The path to achieve it will still depend on sustained investment and deep cultivation in core sports categories, the iterative capability of the product and technology system, and refined operations in key markets such as China.

It is worth noting that Nike CFO Matthew Flandreau revealed that “over the next nine months, revenue and gross margin will continue to be affected by multiple factors. But we are more confident about the direction ahead. Assuming there are no material changes to the tariff environment, the first quarter of fiscal 2027 will be the last quarter in which tariffs create significant year-over-year pressure on gross margin. Gross margin will begin to improve in the second quarter, benefiting from tariff relief and the fading impact of ‘Win Now.’”

The current macro environment also has uncertainty. Factors such as the situation in the Middle East and oil price fluctuations may bring volatility to the market. The brand still needs to prepare to withstand risks.

Transformation is not a 100-meter sprint; it is a long marathon. Nike is reconstructing its long-term competitiveness to support a more steady development going forward.

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