Bernstein Says Nike’s China Reset Will Pressure Growth and Lift Margins
Bernstein says Nike is moving to fully end wholesale online sales in China and cut lower-quality direct-to-consumer online sales to curb discounting and gray-market diversion.
Bernstein says Nike is moving to fully end wholesale online sales in China and cut lower-quality direct-to-consumer online sales to curb discounting and gray-market diversion.
The note says the reset could weigh on Nike’s China business growth in FY27 while adding about 200 basis points to gross margin. Bernstein expects most of the share Nike gives up to flow to Adidas, Anta and other rivals, leaving Nike with only market-level growth over the longer term. It also says the market may have mostly priced in the near-term hit, but may be underestimating the longer-term competitive shift.
The note says the reset could weigh on Nike’s China business growth in FY27 while adding about 200 basis points to gross margin. Bernstein expects most of the share Nike gives up to flow to Adidas, Anta and other rivals, leaving Nike with only market-level growth over the longer term. It also says the market may have mostly priced in the near-term hit, but may be underestimating the longer-term competitive shift.