China, one of Nike's (NYSE:NKE) biggest markets, is growing again following a rare decline last quarter. But that rebound wasn't enough to save the footwear and apparel giant from reporting a sharp COVID-19-related global sales drop in the fiscal fourth quarter.

That period covers March, April, and May, and so it spanned the reopening of retailing in China and the maximum social-distancing efforts that followed in North America and Europe. Those moves pushed revenue down 38% for the quarter, Nike said on Thursday afternoon.

A woman jogging over a bridge.

Image source: Getty Images.

Sales in the U.S. market were down 46%, Europe was lower by 44%, and China notched a slight 1% uptick. The overall decline pressured gross profit margin and sparked significant inventory writedown charges. As a result, Nike posted a $790 million loss for the period.

Management stressed several positive takeaways from the crisis quarter, including surging digital demand and the return to growth in China. Nike is seeing retail traffic improve with each passing week at its reopened stores around the world, too. Those trends have executives expressing confidence that the fiscal fourth-quarter numbers will be an outlier in its broader growth story.