The news: Nike’s turnaround is taking longer than expected as the brand grapples with weak demand outside of North America.

• The company expects revenues to fall 2% to 4% YoY in the current quarter—well short of expectations for a 1.9% increase, per LSEG.
• For the calendar year, Nike anticipates a low-single-digit decline in revenues, mainly due to continued weakness in China.

The big picture: Nike’s fiscal Q3 2026 revenues fell in every market outside of North America, showing that efforts to reignite its brand have not taken hold with international consumers.

• Constant-currency sales in Europe, Middle East, and Africa declined 7% YoY.
• Sales in Asia-Pacific and Latin America fell 2%.
• Greater China had the biggest drop, with sales down 10% YoY.

Nike’s China performance is particularly concerning. The brand expects revenues to fall by another 20% in fiscal Q4, which would mark eight consecutive quarters of declines in its second-largest market. While China’s economic malaise isn’t helping, Nike’s biggest issue is that it is losing touch with Chinese consumers—which has created an opening for rivals like adidas and On Running, alongside local brands like Anta and Li Ning.

Internal challenges, such as a hierarchical decision-making structure, have made it harder for Nike to adapt quickly to local demand, while efforts to push poorer-performing products onto retail partners strained inventory, former and current employees told Reuters.

To combat these issues, Nike overhauled its China leadership and is cleaning up marketplace inventory to support more full-price sales. The company is also following adidas’ playbook by localizing its marketing and product development, though it still lags behind its rival: Locally designed products now account for about 60% of adidas’ China assortment, up from 10% a few years ago.

Other headwinds: While Nike pointed to several bright spots in the quarter—mainly solid growth in North America and renewed momentum for running products—the company faces serious geopolitical and category challenges.

• Athleisure demand is softening. Nike’s sportswear sales declined by low double digits in the quarter, reflecting diminishing interest in athletic apparel as shoppers shift to denim and more structured fits.
• War in the Middle East is disrupting operations. The conflict is reducing traffic to Nike stores and partner retailers in the region, hurting sales and leaving the brand with excess inventory. Nike also warned of “unplanned volatility” due to the conflict, rising oil prices, and any other factors that could affect input costs or consumer behavior.

The implications: Nike’s disappointing performance reflects both macroeconomic and geopolitical headwinds, as well as strategic missteps. Regaining momentum in China, Europe, and other regions will require a move away from a top-down approach toward a locally driven strategy that enables the brand to better anticipate customer needs.

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