A Nike logo is displayed at a Nike store on February 5, 2026 in Austin, Texas.
Brandon Bell | fake images
Nike It beat Wall Street's quarterly earnings and revenue expectations on Tuesday, but its shares fell as it offered a weak sales outlook for the current quarter and said the recovery in its key China market could take longer than Wall Street expected.
Chief Financial Officer Matt Friend said Nike expects sales for its current fiscal fourth quarter to fall between 2% and 4%, compared with Wall Street estimates of a 1.9% increase, according to LSEG. That includes an expected 20% drop in revenue in its Greater China market, Friend said on the company's earnings conference call.
Nike beat expectations across the business in both revenue and results for its fiscal third quarter, but its guidance left investors with more questions about how long its recovery will take. Friend also warned that volatility caused by the Iran war, higher oil prices, rising input costs for the company and lower consumer demand could further complicate Nike's prospects.
Shares fell more than 8% in extended trading.
In the fiscal third quarter, Nike's largest market in North America continued to show steady growth, as revenue rose 3% to $5.03 billion, but that was just shy of Wall Street expectations of $5.04 billion, according to StreetAccount.
Meanwhile, Nike's Greater China market continued to contract and revenue fell 7% to $1.62 billion during the quarter. Still, that total exceeded analyst estimates of $1.5 billion, according to StreetAccount.
Here's how the world's largest sneaker company fared in its fiscal third quarter, compared to estimates from analysts surveyed by LSEG:
- Earnings per share: 35 cents vs. 28 cents expected
- Revenue: $11.28 billion vs. $11.24 billion expected
The company's reported net income for the three months ended Feb. 28 was $520 million, or 35 cents per share. That's a 35% decline from $794 million, or 54 cents per share, a year earlier. That drop came as Nike's gross profit margin fell 1.3 percentage points to 40.2%, “primarily due to higher tariffs in North America,” the company said.
Sales were flat at $11.28 billion, compared to $11.27 billion last year.
Nike continues to work on a colossal turnaround under CEO Elliott Hill. About a year and a half into his tenure, Hill has made progress in fixing parts of the business, but has made clear that it will take time for the entire company to improve given the scale and complexity of the retailer.
He reiterated that expectation Tuesday, saying in a news release that “the pace of progress is different across the portfolio.”
“The areas we prioritized first continue to drive momentum,” Hill said. “The work is not done, but the direction is clear, our teams are moving with focus and urgency, and our foundation is becoming even stronger to build the future of NIKE.”
Chief Financial Officer Matt Friend said Nike's turnaround efforts “will continue to impact results for the remainder of the calendar year.”
Nike's turnaround was already coming at a difficult time, when a global trade war hurt its efforts to improve profitability and boost sales to inflation-weary shoppers. But now the sports company will have to deal with a new war in the Middle East that has already caused gas prices to rise and is expected to drive up consumer prices even further, which could push shoppers to cut back on desirable items, like new clothes and shoes, to save money elsewhere.
Hill has focused in part on revitalizing Nike's business with wholesale partners rather than direct sales on its website and in stores. Wholesale revenue rose 5% to $6.5 billion.
Meanwhile, direct sales fell 4% to $4.5 billion.
