NIKE 2026 Q2 Earnings Revenue Grows 0.6% as Net Income Falls 31.9%

NIKE (NKE) reported fiscal 2026 Q2 results on Dec 18, 2025, with revenue rising 0.6% to $12.43 billion, surpassing expectations. The company’s net income, however, declined 31.9% to $792 million, and Q3 guidance indicated low-single-digit revenue contraction.

Revenue

NIKE’s total revenue reached $12.43 billion, driven by a 0.6% increase from $12.35 billion in the prior year. The Nike Brand segment contributed $12.12 billion, with footwear sales at $7.66 billion and apparel at $3.91 billion. Equipment revenue totaled $550 million, while Global Brand Divisions and Corporate generated $9 million and $3 million, respectively. Converse added $300 million. The performance reflected strong North American demand but softness in China and APLA regions.

Earnings/Net Income

NIKE’s EPS fell 30.8% to $0.54, compared to $0.78 in the prior year, while net income dropped to $792 million. Despite beating revenue estimates, the decline in profitability underscored ongoing margin pressures from tariffs and inventory clearance.

The EPS decline signals a negative trend, reflecting operational challenges amid strategic cost restructuring.

Post-Earnings Price Action Review

The strategy of buying Nike (NKE) when earnings beat and holding for 30 days resulted in a significant loss. The strategy returned -61.36%, underperforming the benchmark by 147.18%. With a maximum drawdown of 0% and a Sharpe ratio of -0.52, the strategy also indicated a high level of risk.

Despite beating revenue and earnings estimates, the stock price dipped 0.58% in the latest trading day, with a 3.11% weekly decline but 4.34% month-to-date gains.

CEO Commentary

Elliott Hill, President and CEO, emphasized progress in "right-sizing Classics" and diversifying product portfolios. North America, representing 40% of the business, showed 20%+ growth in performance categories like Running. Challenges persist in China, where a "fresh approach" is needed to restore premium positioning. Strategic priorities include accelerating the Sport Offense, elevating retail experiences, and investing in innovations like Nike Mind and AeroFit.

Guidance

NIKE forecast Q3 revenue to decline in the low single digits, with North America showing modest growth. Gross margins are expected to fall further by 175–225 basis points, reflecting ongoing cost pressures from tariffs and inventory management.

Additional News

Recent developments highlight strategic shifts under CEO Elliott Hill, who emphasized repositioning Nike as a sports-focused brand. Leadership changes, including Venkatesh Alagirisamy as COO, aim to accelerate decision-making. China and Converse remain key challenges, with double-digit revenue declines. Tariffs, now projected at $1.5 billion annually, continue to weigh on margins. Analysts note the turnaround remains costly, with CFO Matthew Friend acknowledging the business is in the "middle innings" of its transition.