Key Takeaways
- Nike exceeded Q3 earnings and revenue projections but issued disappointing guidance for the upcoming quarter
- The company forecasts Q4 revenue to decline 2%–4%, contrasting with analyst expectations of a 1.9% gain
- Greater China sales decreased 7% to $1.62 billion — the seventh consecutive quarterly decline, with projections pointing to a 20% plunge in Q4
- Profit margins compressed by 1.3 percentage points to 40.2%, pressured by elevated tariff costs in North America
- Shares dropped over 9% in premarket trading Wednesday, hovering near $47.88
Nike delivered stronger-than-anticipated third-quarter results on Tuesday, yet Wall Street responded with a decisive selloff. The athletic apparel giant’s disappointing forward guidance and persistent challenges in the Chinese market overshadowed its quarterly performance.
$NKE | Nike Q3’26 Earnings Highlights
🔹 Revenue: $11.28B (Est. $11.24B) 🟢 FLAT YoY
🔹 EPS: $0.35 (Est. $0.31) 🟢
🔹 NIKE Brand Revenue: $11.01B (Est. $10.94B) 🟢
🔹 Gross Margin: 40.2% (Est. 39.8%) 🟢
🔹 Greater China EBIT: $467M (Est. $269.5M) 🟢
🔹 Inventory: $7.49B (Est.… pic.twitter.com/UqgGtsq57I— Wall St Engine (@wallstengine) March 31, 2026
CFO Matt Friend disclosed that the company anticipates fourth-quarter revenue to contract between 2% and 4%. This projection stands in stark contrast to analyst consensus, which had predicted growth of 1.9%. Looking ahead to the full calendar year, Nike now forecasts a low single-digit percentage decline in total sales.
The third quarter delivered earnings of 35 cents per share on $11.28 billion in revenue. Wall Street analysts had modeled earnings between 28 and 30 cents per share with revenue estimates ranging from $11.23 billion to $11.24 billion. While these results represented a clear victory, the forward-looking commentary dominated investor attention.
Net profit for the period plummeted 35% year-over-year to $520 million, compared to $794 million in the same quarter last year. Gross profit margin contracted 1.3 percentage points to 40.2%, with management attributing the compression primarily to increased tariff expenses across North American operations.
The China Challenge Deepens
Revenue from Greater China declined 7% to $1.62 billion, extending a troubling streak to seven straight quarters of contraction. Looking ahead, Nike is preparing for an even steeper 20% revenue decline in that crucial market during the fourth quarter. Given that the region represents approximately 15% of Nike’s worldwide revenue, this trajectory carries significant implications for overall performance.
Barclays analyst Adrienne Yih highlighted that the primary concern centers on “the depth and slow speed of a very deliberate Greater China reset, likely to take four quarters to return to growth.” She suggested the stock will “likely to be range-bound in the near term” while identifying price points below $50 as compelling opportunities for investors with extended time horizons.
Nike faces mounting competitive pressure in China from domestic brands Anta and Li Ning, while simultaneously confronting growing challenges from On Running and Hoka in international markets.
North America delivered relative stability. Regional revenue advanced 3% to $5.03 billion, narrowly missing the $5.04 billion consensus estimate. Wholesale channel revenue increased 5% to $6.5 billion, while direct-to-consumer sales declined 4% to $4.5 billion — a shift consistent with CEO Elliott Hill’s strategic emphasis on rebuilding wholesale partnerships.
Transformation Remains Ongoing
Hill, who assumed leadership of Nike in late 2024, has consistently communicated that the company’s recovery will require patience. During Tuesday’s earnings call, he noted that “the pace of progress is different across the portfolio.”
Friend also highlighted external headwinds, including geopolitical instability in the Middle East and climbing oil prices, which threaten to elevate both production costs and pressure consumer discretionary spending. He emphasized that Nike’s current guidance reflects present conditions and remains subject to revision.
Nike stock has declined 15.8% in 2025 and has surrendered an additional 17.1% year-to-date. Shares traded on the Frankfurt exchange fell 8.7% at Wednesday’s opening bell.
Jefferies analysts, under the direction of Randal Konik, characterized the third quarter as evidence of “steady progress” with improved inventory management and accelerating momentum in North America and wholesale channels, while recognizing that China and Nike Digital represent “areas to work through.”
