Bernstein SocGen Group lowered its price target on Nike Inc. to $68 from $72. The firm cited concerns over Nike's strategic pullback in China. Despite this reduction, Bernstein maintained its "Outperform" rating on Nike's shares. The adjustment reflects expectations of a near-term drag on growth due to Nike's new strategy in the region.
Nike's revised outlook stems from its decision to eliminate its wholesale online business in China. The company also plans to reduce lower-quality direct-to-consumer sales. This move aims to enhance brand equity and increase full-price sales. Nike intends to achieve this by reducing deep discounts and gray market activity.
Bernstein anticipates this strategy will create a headwind for China's growth. The firm forecasts a low-teens percentage decline for the region in fiscal year 2027. This decline would impact Nike's total company growth by approximately two percentage points.