Seeking new growth points! Nike (NKE.US) steps up investment in outdoor sports business, focusing on the Chinese market

After a tough year, Nike (NKE.US) is looking for new growth points and is ready to promote its outdoor business All Conditions Gear (ACG) globally. Nike President Heidi O'Neill and Craig Williams said in a memo: "We are now investing more resources in this incredible growth opportunity." They added that they will continue to push new ACG investments in the coming months across the organization's global, regional and city teams.

Nike's ACG business produces hiking gear such as waterproof boots, tear-resistant jackets and everyday backpacks. The detailed plans for the business have yet to be determined. Nike executives said that the strategy, organizational design and operating model for ACG are still being refined.

As part of the new initiatives, Angela Dong will be promoted to Chairman and CEO of Greater China and CEO of ACG Brand Global. Nike said that China will be the direct focus of ACG business, and as CEO of ACG Brand Global, Dong will lead the global ACG business's product, brand and sales, accelerating the development of ACG brand in the global and Chinese markets.

Under the backdrop of global economic uncertainty and slowing consumer spending, Nike's performance is facing continuous decline. Nike announced in September that former executive Elliott Hill would rejoin the company to succeed John Donahoe as president and CEO. Hill worked at Nike for 32 years and held senior leadership positions in Europe and North America, helping the company grow its business to over $39 billion. Hill led Nike's consumer market as president before retiring in 2020, overseeing all commercial and marketing operations for the Nike brand.

Nike's latest earnings report showed that its first-quarter revenue in fiscal 2025 was US$11.6 billion, down 10.4% year-on-year, missing market expectations; net profit was US$1.051 billion, down 28%; diluted EPS was US$0.70, topping market expectations of US$0.52. Nike also withdrew its full-year earnings guidance. Matt Friend, the company's chief financial officer, said that the withdrawal of guidance was due to the upcoming leadership transition.

Nike wants to provide new growth opportunities through the booming outdoor sports market, especially the huge potential in China. However, it cannot be ignored that the high prosperity of the outdoor track has attracted many clothing brands to set up, in addition to Patagonia, North Face, and Arc'teryx, etc., its old rival Adidas is also laying out outdoor products. It seems to be a big challenge for ACG to stand out from the crowd.