NIKE(US:NKE) Jing Ji Guan Cha Wang·2026-01-21 14:09Core Viewpoint - Nike is undergoing significant leadership changes in its Greater China region due to ongoing revenue declines, with the appointment of Cathy Sparks as the new Vice President and General Manager to address these challenges [2][6]. Group 1: Revenue Decline - The Greater China region has experienced six consecutive quarters of revenue decline, with a 13% year-over-year drop in fiscal year 2025, resulting in revenues of $6.586 billion, making it Nike's worst-performing global market [2]. - In the second quarter of fiscal year 2026, revenues in the Greater China region fell by 17%, with a 49% year-over-year drop in earnings before interest and taxes [3]. Group 2: Inventory and Discount Issues - Nike is facing a vicious cycle of high inventory and discounting, with total inventory at $7.5 billion at the end of fiscal year 2025, while the overall gross margin decreased to 42.7%, down 1.9 percentage points [3]. - The frequent discount promotions are eroding brand profits, leading to a decline in direct-to-consumer (DTC) sales, with a 36% drop in digital business revenue and an 18% decline in direct sales [3]. Group 3: Market Competition and Brand Perception - Analysts suggest that Nike's product technology and quality are losing appeal in the competitive Chinese market, where local brands are gaining consumer preference [4]. - The shift in consumer preferences towards local culture and brands is impacting Nike's market position, as its digital marketing strategies are not as agile as those of local competitors [4]. Group 4: Leadership and Strategic Focus - Angela Dong, who has led the Greater China region since 2015, emphasized "fashion, digitalization, and localization" as key strategies, but the effectiveness of these strategies is now being questioned [5]. - Cathy Sparks' experience in DTC operations and her previous roles in various global markets are seen as crucial for addressing the current challenges in the Greater China region [6].