Nike is ending all online sales of its products in mainland China through distributor Pou Sheng starting January 1, 2027, a channel that accounted for 15% of Pou Sheng's 2025 revenue. Nike shares have fallen 32.11% year to date and 41.45% over the past year, closing at $42.96. The most followed valuation narrative pegs Nike's fair value at $36.83, suggesting the stock is overvalued, while its current price-to-earnings ratio of 20.5 times sits below the US luxury industry average of 21.7 times and a fair ratio of 26.9 times. The company maintains a solid operating margin above roughly 10% and a return on invested capital nearly double its cost of capital, though revenue growth is projected at around 3% over the next couple of years. Investors are weighing weaker demand, the China restructuring, and a slower turnaround against completed buybacks and product plans.
Pou Sheng International Holdings LtdPou Sheng loses 15% of its 2025 revenue from Nike's decision to end online sales through it.
Nike IncNike ending online sales through Pou Sheng reduces a key distribution channel in China, weakening demand access.