Nike's quarterly results exceeded expectations, though declining sales in China weighed on the stock.

Sportswear and footwear manufacturer Nike beat Wall Street expectations with its fourth-quarter financial results. The company's revenue reached $11 billion, exceeding analysts' forecasts. Adjusted earnings also came in higher than expected at 20 cents per share, compared to the 12-cent projection.

Despite the strong report, Nike's stock fell more than 3% in pre-market trading, as the company indicated a further decline in revenues for the upcoming periods. Investors were particularly concerned about the sharp drop in sales in the Chinese market.

In the fourth quarter, the company's total revenue declined 1% on a year-over-year basis. Wholesale sales grew 4% and reached $6.6 billion, but this proved insufficient as Nike Direct sales fell 7% to $4.1 billion. Online sales declined 12%, while sales from company-owned stores fell 7%.

The weakest results were again recorded in the Greater China region, where sales in constant currency fell 17%. Although this outcome was better than the 20% decline previously forecasted by the company, the region remains a significant challenge, as local brands are gaining market share.

The company's overall gross margin expanded to 49.2%, largely due to one-time tax and tariff-related benefits. Net income reached $1.1 billion, compared to $217 million a year earlier.

The Converse brand showed particularly weak performance, with sales declining 32% to $244 million.

According to Nike's leadership, the company managed to strengthen its business fundamentals over the past year and certain improvements are already evident, but market competition and weak consumer demand remain significant challenges. The company's chief financial officer noted that Nike will continue to focus on cost optimization and margin improvement in the coming periods.