Earnings Overview
Nike announced fourth‑quarter results for fiscal 2026, delivering revenue of $11.0 billion, which exceeded analysts’ average estimate of $10.85 billion. Quarterly revenue declined 1% year‑over‑year. Adjusted earnings were $0.20 per share, topping the consensus estimate of $0.12, while reported diluted earnings per share were $0.72, reflecting a $0.52 per‑share benefit from the anticipated recovery of tariffs under the International Emergency Economic Powers Act (IEEPA).
Segment Performance
Wholesale revenue rose 4% to $6.6 billion, offsetting a 7% decline in Nike Direct revenue, which fell to $4.1 billion. Within Nike Direct, digital sales dropped 12% and sales at company‑owned stores fell 7%. Greater China sales contracted 17% on a constant‑currency basis, a steepening from the prior‑period 10% decline; the company had previously projected a 20% drop, so the actual decline was slightly less severe. Greater China represents roughly 15% of Nike’s annual revenue and is its third‑largest market globally.
Profitability and Margins
Gross margin expanded to 49.2%, up from 40.3% a year earlier, driven primarily by a $986 million tariff‑recovery benefit that added approximately 900 basis points to margin. Net income surged to $1.1 billion, compared with $217 million in the same quarter last year.
Brand‑Level Results
Nike Brand revenue was essentially flat at $10.7 billion, with growth in North America offset by declines in Greater China and Europe, the Middle East and Africa. Converse revenue fell 32% to $244 million.
Full‑Year Outlook
For fiscal 2026, Nike projects revenue to be flat at $46.4 billion and net income to decline 3% to $3.1 billion, equating to $2.10 per diluted share. The company warned that sales are expected to decline further through the first half of fiscal 2027, citing continued competition and elevated inventory levels.
Management Commentary
CEO Elliott Hill said the company had strengthened its foundation during the year and noted encouraging momentum in performance products despite ongoing sales pressure. CFO Matthew Friend emphasized a continued focus on improving profitability and managing costs amid a challenging retail environment.
Market Reaction
Following the release, Nike’s shares slipped more than 3% in pre‑market trading on Wednesday.