Key Takeaways
- Nike delivered adjusted earnings per share of 20 cents versus the 13-cent consensus estimate, with quarterly revenue reaching $10.97 billion against expectations of $10.86 billion
- Greater China sales declined 12% to $1.30 billion, although this exceeded analyst projections of $1.24 billion
- The company’s gross margin expanded 8.9%, aided by approximately $986 million in tariff refunds following the Supreme Court’s reversal of numerous Trump-era global tariffs
- Shares of NKE declined approximately 3.5% during Wednesday’s premarket session; year-to-date, the stock has plummeted roughly 35% in 2026
- Management forecasted essentially flat earnings performance for the initial two quarters of fiscal 2027, anticipating revenue declines during the first half of the year
Nike delivered better-than-anticipated financial results for its fiscal fourth quarter, yet Wall Street responded with skepticism. Shares tumbled approximately 3.5% in Wednesday’s premarket trading as a conservative forward outlook and persistent struggles in China overshadowed the positive earnings surprise.
The athletic apparel giant posted adjusted earnings of 20 cents per share, significantly surpassing the Wall Street consensus of 13 cents. Quarterly revenue totaled $10.97 billion, exceeding the $10.86 billion projection.
Gross margin performance strengthened notably, rising 8.9% during the quarter. A substantial contributor to this improvement was a tariff reimbursement approaching $986 million, stemming from the Supreme Court’s ruling to overturn many of the global tariffs implemented under President Trump. This refund boosted earnings per share by 52 cents, though analysts had already stripped this figure from their adjusted forecasts. The company disclosed that it had successfully collected more than $300 million in actual cash from these claims by the end of the quarter.
Overall net income reached $1.07 billion, translating to 72 cents per share, representing a dramatic improvement from the prior year’s $211 million, or 14 cents per share, during the comparable period.
China Performance Continues to Lag
Revenue from Greater China contracted 12% to $1.30 billion. While this figure surpassed the Street’s $1.24 billion forecast, the decline highlights the substantial challenges Nike faces in regaining momentum in what represents its third-largest geographic market. Chief Executive Elliott Hill emphasized the company’s determination, stating Nike is “fully committed to winning” back market share in China, while conceding that tangible results “aren’t there yet.”
Departing Chief Financial Officer Matt Friend indicated that China revenue will probably remain pressured as Nike collaborates with retail partners to work through surplus inventory levels. The region represents approximately 15% of Nike’s total annual revenue.
North America, representing Nike’s largest market, recorded 3% growth to $4.83 billion, though it marginally missed StreetAccount’s projection of $4.88 billion.
Sportswear category sales experienced double-digit percentage declines throughout the quarter. Friend attributed this weakness to Nike’s consumer base being “under pressure around the world.”
Forward Guidance Dampens Investor Sentiment
Nike provided guidance calling for essentially flat earnings during the opening two quarters of fiscal 2027, with revenue anticipated to contract in the first half. The company projects gross margin for fiscal Q1 2027 to be marginally positive.
Analysts at Bernstein observed that “revenue declines through H1 mean no earnings growth until at least H2’27 as Nike prioritizes marketplace health over near-term sales.”
Shares of NKE have plunged approximately 35% during 2026. European competitors Adidas and Puma both declined more than 1% in response to Nike’s quarterly report.
On a more optimistic note, Hill highlighted robust World Cup marketing initiatives, accelerated product introduction timelines, and strengthening demand within the football category. The company intends to introduce over a dozen new footwear designs, though Hill acknowledged that meaningful results from these launches will require patience and time.
Nike additionally announced a forthcoming leadership change, confirming that former Pfizer executive David Denton will assume the CFO position from Friend, effective August 17.
Nike currently trades at a forward price-to-earnings multiple of 21.95, compared with Adidas’s 16.81 valuation, according to LSEG data.
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