Nike lost over $3 of Greater China sales for each $1 North America added

Working back to the year-earlier figures gives each region a dollar size. Greater China's $1.18 billion, after a 22% reported fall, implies about $1.51 billion a year ago, a loss of roughly $333 million in a single quarter ^[6][1]. North America's 2% rise to $5.13 billion implies a gain of roughly $101 million ^[8][2]. China is about a tenth of quarterly sales and North America about 46% ^[11]. Even so, China took away more than three dollars for every dollar North America added ^[3]. Converse, down 28% to $263 million, gave back about $102 million on its own, roughly all of the North American increase ^[7][4].

The earnings beat came from cost. Revenue missed the $11.32 billion consensus by about $110 million, roughly 1% ^[1][5]. A Seeking Alpha contributor put first-quarter revenue down 4%, with Europe weak as well as Greater China, and wrote that increased demand-creation spending "failed to stem revenue losses" ^[18][19].

Pace returns about $2.50 of savings for each dollar of charges, a net $1.5 billion by fiscal 2031 ^[6]. Thirty percent of the charges land in the first year ^[7]. Their 15-cent hit is about 12% of the $1.25 midpoint of guidance ^[11][8]. Besides cutting roles, the program reorganizes Nike into three geographies, modernizes the supply chain and adds a campus in India ^[9]. The guidance also implies a slower rest of the year. At the midpoint, the first quarter's 48 cents leaves about 77 cents for the other three quarters, roughly 26 cents each and about half the opening quarter's rate ^[9]. The quarterly and full-year figures may not be on the same adjusted basis, so that split is approximate.

The case for a better outcome starts in China, where part of the fall is Nike's own choice. Nike is cutting ties with thousands of online distributors from January ^[14]. Shoppers are being steered to Nike's own digital properties and to storefronts on Tmall, JD.com and Douyin, with the stated aim of reducing pricing inconsistency ^[14]. North America wholesale grew 9% ^[8], or rather, wholesale grew 9% inside a region that grew 2%, so the rest of North American revenue grew more slowly than 2% ^[12]. Pace savings could also arrive ahead of the 2031 end date ^[10]. I think Nike's own sequence holds on this evidence: the first slice of charges and the guided sales decline both fall in fiscal 2027 ^[2][11]. Nike did not say when revenue growth returns. The view is wrong if Greater China's currency-neutral decline narrows sharply once the distributor cut has run for a year, since that would make most of the 26% a channel decision ^[6].

Elliott Hill, Nike's president and chief executive, grouped China with two of the company's own lines. "We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we're taking deliberate actions to strengthen those businesses the right way for the long term," Hill said in a statement ^[13].