Why Nike Stock Dropped 11% in June

Nike stock tumbled 11% in June as investors braced for earnings and absorbed fallout from competitor Lululemon's weak results. The selloff proved premature—Nike's fiscal Q4 earnings beat expectations on both revenue and profit, triggering a recovery in the shares.

The beat came despite a 17% sales decline in China, one of the company's key growth markets. Management also cut near-term guidance, signaling persistent headwinds. But the quarter delivered positive surprises: gross margins expanded thanks to tariff refunds, and wholesale revenue in North America surged by double digits. New leadership is now executing a turnaround strategy to address the China weakness and broader competitive pressures.

The June drawdown created a classic pre-earnings dislocation—sentiment collapsed ahead of results that ultimately exceeded the lowered bar. Lululemon's disappointment amplified sector-wide caution, punishing Nike before it reported.