Nike beats Q4 estimates as North America growth offsets China weakness

Nike reported Q4 revenue of $11 billion, down 1% but above estimates, as North America growth offset deepening weakness in China and direct-to-consumer sales.

"The results reflect decisive actions to strengthen the foundation of Nike Inc. and reposition our business for long-term growth," President and CEO Elliott Hill said in a statement. "While we continue to face top-line headwinds, we're encouraged by progress in performance product."

Underlying earnings per share came in at 20 cents, topping the 13-cent consensus compiled by LSEG. Reported EPS of 72 cents included a 52-cent benefit tied to a $986 million anticipated refund of import tariffs, which pushed gross margin up roughly 900 basis points to 49.2%. Full-year revenue was $46.4 billion, down 2% on a constant-currency basis and slightly above the $46.27 billion consensus. Full-year net income fell 3% to $3.1 billion.

North America, Nike's largest market, posted a 3% revenue gain to $4.8 billion in the quarter, while wholesale revenue rose 1% to $6.6 billion. Greater China revenue dropped 12% on a reported basis and 17% in constant currency, a sharper decline than the 10% slide in the prior quarter, as local brands continued to gain ground. Nike Direct sales fell 7% to $4.1 billion, with digital down 12% and owned-store sales declining 7%. Converse revenue plunged 32% to $244 million. Outgoing CFO Matthew Friend said sell-through remains challenged and warned conditions were unlikely to improve through at least the first half of fiscal 2027.

The mixed results leave Nike in a holding pattern as Hill's turnaround enters its second year. The company has cut 1,400 roles this year and lowered demand creation spending by 4% to $1.2 billion. Nike Running posted its fifth consecutive quarter of double-digit gains, adding $1 billion to the business, but apparel and Jordan Streetwear remain under pressure. Shares fell about 4% in after-hours trading before paring some losses. The stock has declined more than 35% so far in 2026. Investors will watch for signs of sustained momentum in North America and stabilization in China when Nike reports fiscal first-quarter results later this year.

This article is for informational purposes only and does not constitute investment advice.