Nike Inc. is expected to see its operating margin in China rise by 200 basis points in fiscal year 2027, reaching 24 % — a figure well above Wall Street’s expectation of a roughly flat year‑on‑year margin. According to a recent Bernstein research note, this improvement will be driven by Nike’s decision to exit partner‑run online stores and discount wholesale channels.
This margin growth comes at the cost of a significant revenue decline. Bernstein estimates that the wholesale online channel, which accounts for around 18–19 % of Nike’s Chinese business, will result in an approximate $1 billion revenue loss as it is fully phased out over the coming quarters.
Analysts forecast that China’s performance will decline by a low double‑digit percentage in constant currency terms in fiscal 2027, putting roughly 2 percentage points of pressure on the company’s overall growth.
Last week, Nike and its two largest wholesale partners in China — Topsports and Pou Sheng — confirmed that partner‑managed online stores will stop selling Nike products starting in January 2027.
From that date, Nike’s digital presence in China will be limited to its own web channels and app, as well as official flagship stores on platforms such as Tmall, JD.com, and Douyin.
The move aims to reduce the number of grey resellers and deep discounting, which company leadership believes have harmed the brand’s image.
Bernstein analysts describe the goal as a shift toward a “more premium digital market,” a phrase taken from an open letter by Kathy Sparks, Vice President and General Manager of Nike Greater China. However, they caution that most of the lost wholesale sales are unlikely to be recovered. In their view, customers who previously bought discounted online products will likely switch to competing brands rather than pay full price through Nike’s direct channels.
Nike has been losing market share in China every year since 2020, when international brands collectively held 57 % of the market. Nike’s individual share peaked at 27 % that year and had fallen to 16 % by 2025.
Bernstein identifies Adidas as the main short‑term beneficiary, noting that partners like Topsports and Pou Sheng will need to compensate for the lost Nike online volumes and are likely to place greater emphasis on Adidas, which is already posting double‑digit growth rates in China.
Domestic brands such as Anta and Li Ning are also expected to gain ground in the lower price segment that was previously served by Nike’s active online discounting.
Premium Western brands like On and Hoka are projected to remain largely unaffected, given their limited wholesale distribution in the country.
Bernstein has lowered its target price for Nike shares from 72to68, based on a 27x multiple applied to its revised earnings per share (EPS) estimate of 2.50forfiscal2028 — downfromtheprevious2.67. The EPS forecast for fiscal 2027 has been reduced from 2.10to1.96.
Nike’s stock is rated “outperform,” implying a 58 % upside from its July 29, 2025, closing price of $43.05. Analysts expect moderate single‑digit growth in China for fiscal 2028, broadly in line with overall market dynamics.
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