Nike on Tuesday it posted quarterly earnings and revenue that beat Wall Street expectations, despite another sales decline in its key market of China.
Here's what Nike reported for its fiscal fourth quarter compared to analyst expectations, based on LSEG consensus estimates:
- Earnings per share: Adjusted 20 cents vs. expected 13 cents
- Revenue: $10.97 billion vs. $10.86 billion expected
Nike shares fell as much as 8% in extended trading Tuesday before making up for much of the losses.
The company said its gross margin increased 8.9% during the quarter, largely due to an expected tariff refund of nearly $986 million after the Supreme Court struck down many of President Donald Trump's global tariffs. Fee refunds contributed 52 cents to Nike's earnings per share during the quarter.
Analysts excluded that gain from their adjusted earnings expectations.
Company executives said in a call with analysts that by the end of the quarter, Nike had raised more than $300 million in cash related to its fee refund claims.
Nike posted net income of $1.07 billion, or 72 cents per share, compared with $211 million, or 14 cents per share, a year earlier.
Revenue rose to $10.97 billion, down 1% from $11.1 billion in the year-earlier period.
Nike's revenue in North America, its largest market, rose 3% to $4.83 billion. It missed analyst expectations of $4.88 billion, according to StreetAccount.
Sales in Nike's Greater China market fell 12% to $1.3 billion. Still, the company beat Wall Street expectations of $1.24 billion in revenue.
In a call with analysts, CEO Elliott Hill said the company is “fully committed to winning back” the Chinese market.
“Overall, the results are not there yet,” Hill said. “We know we are not realizing our full potential, particularly in Nike sportswear and Jordan streetwear, where direct sales remain a challenge, affecting both current discounts and future order books.”
For all of fiscal 2026, Nike reported net income of $3.11 billion, or $2.10 per share, compared with $3.22 billion, or $2.16 per share, a year earlier.
Looking ahead, the company reiterated guidance provided last fiscal quarter, expecting earnings to be “flat” through the first two quarters of fiscal 2027, according to Friend. Nike also expects gross margin for the fiscal first quarter of 2027 to be slightly positive.
The gains come as Hill has been trying to reposition Nike for growth amid declining sales. The company previously warned that its recovery would not be linear as certain parts of the business improve at different rates.
Hill previously said that the segments Nike initially focused on changing are starting to see “momentum.”
The recovery effort also faces macroeconomic uncertainty, fueled by tariffs, war in the Middle East, rising gas prices and more. Chief Financial Officer Matt Friend said on the call with analysts that Nike's consumer base is “under pressure around the world,” which has a huge impact on sportswear, whose sales fell by a double-digit percentage in the quarter.
In April, Nike instituted a broad round of layoffs, eliminating 1,400 positions across the organization in its second workforce reduction of the year.
Last week, the company announced a planned CFO transition, with former Pfizer Executive David Denton will take over as Friend effective August 17.
Still, Nike has seen a boom thanks to the World Cup, held across North America this summer. While not an official sponsor, the company saw its ads vastly outperform its sneaker rivals. adidas and gain significant traction on social media.
“What feels different this time is that we're not treating the tournament as a one-time moment, we're using it to reshape our business, telling a connected story over time, engaging different communities in relevant ways and building momentum that goes far beyond the tournament,” Hill said on the call with analysts.
