A shopper carries Nike bags in San Francisco, California, U.S., on Wednesday, Dec. 17, 2025.
David Paul Morris | Bloomberg | fake images
Nike It posted quarterly earnings and revenue Thursday that topped Wall Street estimates, as strength in North America helped offset a drop in sales in China.
The company's shares fell about 10% in trading Thursday, as investors digested weakness in China and the sustained impact Nike is taking from higher tariffs.
Here's what Nike reported for its fiscal second quarter of 2026, based on LSEG consensus estimates:
- Earnings per share: 53 cents vs. 38 cents expected
- Revenue: $12.43 billion vs. $12.22 billion expected
The sportswear retailer said sales in North America rose 9% to $5.63 billion. But revenue in its Greater China market fell 17% to $1.42 billion.
The sneaker company has been embarking on CEO Elliott Hill's turnaround strategy for just over a year, focusing on regaining its growth and market share, liquidating old inventory and investing in wholesale relationships.
“Fiscal 2026 continues to be a year of taking action to resize our classics business, return Nike digital to a premium experience, diversify our product portfolio, deepen our connection with consumers, strengthen our relationships with partners and realign our teams and leadership,” Hill said in a call with analysts. “And I say we're halfway through the inning of our comeback.”
“We are nowhere near our potential,” he added.
Hill said Nike's improvements in its Chinese market “are not happening at the level or pace we need to drive broader change,” although he said the country remains one of the company's most powerful long-term opportunities.
Nike expects fiscal third-quarter revenue to fall by a low-single-digit percentage, with modest growth in North America. It also anticipates gross margins will fall between 1.75 and 2.25 percentage points, including a 3.15 percentage point hit due to tariffs.
The company said wholesale revenue rose 8% to $7.5 billion during the quarter. But direct sales, which were a focus for Nike in the years before Hill took over and stepped away from the strategy, fell 8% to $4.6 billion.
Nike has also been feeling the impact of tariff increases. It said Thursday that its gross margin declined 3 percentage points and inventories fell 3% primarily due to higher tariffs.
The sneaker company has also reported weakness in its Converse brand. In its fiscal first quarter, Nike said Converse sales fell 27%; on Thursday reported a 30% drop in revenue for the sneaker brand.
Despite weakness in some parts of Nike's business, the company highlighted some areas of strength and new initiatives ahead. Chief Financial Officer Matt Friend said on the call that Nike.com recorded its best Black Friday ever this year, partly driven by the release of the Air Jordan “Black Cat.”
Nike also plans to launch a new footwear platform in January called Nike Mind, which aims to help athletes prepare for performance and competition, Hill said on the call.
Nike has been making bigger internal changes under Hill.
Earlier this month, Nike underwent leadership changes to “remove layers,” according to Hill. Under its “Win Now” strategy, the company announced that chief commercial officer Craig Williams would be leaving the sneaker giant.
Hill called the reorganization a move “about growth and offense.”
“Taken together, these changes amount to us peeling back layers and better positioning Nike to continue making an impact like only Nike can,” Hill said in a statement at the time.
Nike shares have fallen more than 13% this year through Thursday's close.
