Nike earnings beat analysts' expectations — but CEO says 'we still have work ahead'

Nike blew past the Street’s expectations in its latest earnings report. The sportswear giant disclosed fiscal first-quarter 2026 earnings of $0.49 per share on revenue of $11.7 billion after the bell Tuesday. That represents a 1% jump in revenue on a “reported basis” from the same period last year, Nike said. Still, the company's net profit tanked 31% to $700 million.

Jefferies analysts expected an EPS of $0.29 on revenue of about $11.2 billion for the quarter, which ended on Aug. 31. Zacks Research, meanwhile, predicted $0.28 EPS with $11 billion in sales, and FactSet’s consensus estimate was similar — analysts projected an EPS of $0.27 on revenue of $11 billion, per Barron’s. Both Zacks and Barron’s said this would indicate about a 5% decline in sales. 

Nike Brand brought in $11.4 billion in revenue, the company said, pointing to a “currency-neutral growth in North America” that was “offset by a decline in Greater China.” Nike Direct revenue came in at $4.5 billion — a 4% drop on a reported basis because of a 12% drop in Nike Brand Digital. Wholesale revenues were $6.8 billion, a 7% jump on a reported basis. Revenue for Nike’s Converse brand saw a 27% drop on a reported basis. 

“This quarter, Nike drove progress through our Win Now actions in our priority areas of North America, Wholesale, and Running,” CEO Elliott Hill said in a press release. “While we’re getting wins under our belt, we still have work ahead to get all sports, geographies, and channels on a similar path as we manage a dynamic operating environment.”

The company’s gross margin dropped 320 basis points to 42.2% — mainly from “lower average selling price,” which Nike said reflects “higher discounts” plus “higher tariffs in North America.” Jefferies had projected a gross margin decrease of 350 basis points.

Nike reported a 2% drop in inventories to $8.1 billion compared with last year. The company said the dip in units was partially offset by increased product costs from higher tariffs. Jefferies analysts had expected a “modest beat”; it projected Nike would show a rebound thanks to its innovation and retail momentum — plus a “cleaner marketplace” — despite “tariff and inventory headwinds.” The firm’s analysts said to “just buy it” ahead of the earnings release.  

Matthew Friend, Nike’s executive vice president and chief financial officer, said in the press release that progress won’t be “linear” as parts of Nike’s business “recover on different timelines.” He added, “While we navigate several external headwinds, our teams are focused on executing against what we can control.”

Nike’s stock is down about 22% over the last year. It was up less than 1% right after market close.  

“Nike results appear encouraging, with improvements driven by North America and the wholesale channel, as well as less acute declines within Nike Direct,” M Science analyst Drake MacFarlane said in a statement to Quartz. “The wholesale channel inflecting positive suggests that Nike’s rapprochement with retailers is effective and does not seem to have cannibalized the [direct-to-consumer] channel’s recovery so far.”