The Nike logo is displayed at a Nike store in Austin, Texas, on February 5, 2026.
Brandon Bell | Getty Images
shares of nike The company fell in after-hours trading on Tuesday as it warned that sales would decline for the rest of the calendar year, with an expected 20% decline in the current quarter in its key Chinese market.
According to LSEG, Chief Financial Officer Matt Friend said on the earnings call that Nike expects sales to decline 2% to 4% in the fourth quarter of the current fiscal year, compared to Wall Street’s expectations for a 1.9% increase.
For the calendar year, the company expects sales to decline by a low single digit, driven by growth in North America, offset by declines in China, Friend said. This outlook was not comparable to estimates.
Nike reported third-quarter results that beat expectations for both sales and bottom line business, but the guidance left investors with more questions about how long the recovery will take. Friend also cautioned that Nike’s guidance is based on today’s global economic conditions and is subject to change in light of recent geopolitical instability.
“We also recognize that the environment we live in is increasingly dynamic, and unplanned fluctuations may occur due to turmoil in the Middle East, rising oil prices and other factors that may impact input costs and consumer behavior,” Friend said. “We focus on what we can control.”
The stock price fell more than 8% in extended trading.
Here’s how the world’s largest sneaker company performed in its fiscal third quarter compared to expectations of analysts surveyed by LSEG.
Earnings per share: 35 cents vs. 28 cents expected Earnings: $11.28 billion vs. $11.24 billion expected
The company reported net income of $520 million, or 35 cents per share, for the three months ended Feb. 28. This was a 35% decrease from $794 million, or 54 cents per share, in the year-ago period. The plunge came as Nike’s gross profit margin fell 1.3 percentage points to 40.2%, “primarily due to increased tariffs in North America,” the company said.
Sales were flat at $11.28 billion, compared to $11.27 billion a year ago.
Nike beat expectations on sales and bottom line, but reported mixed results regionally. North America, Nike’s largest market, continued to show steady growth with sales up 3% to $5.03 billion, according to Street Accounts, but slightly short of Wall Street’s expectations of $5.04 billion.
Meanwhile, Nike’s Greater China market continued to shrink, with sales dropping 7% to $1.62 billion in the quarter. Still, the total was higher than analysts’ expectations of $1.5 billion, according to Street accounts.
Nike continues to undergo a major restructuring under CEO Elliott Hill. In his roughly 18 months on the job, Mr. Hill has made progress in fixing parts of the business, but he has made clear that it will take time to turn around the company overall, given the retailer’s size and complexity.
He reiterated that prediction Tuesday, saying in a news release that “the pace of progress will vary across the portfolio.”
“Our initial priorities continue to generate momentum,” Hill said. “The work is far from done, but the direction is clear, our team is moving with focus and urgency, and the foundation on which to build NIKE’s future is even stronger.”
Friend said Nike’s turnaround efforts “will continue to impact operating results through the remainder of the calendar year.”
Nike’s recovery already comes at a tough time, with efforts to improve profitability and boost sales from inflation-weary shoppers hit by a global trade war. But now the company will have to fight a new war in the Middle East. The war has already led to higher gas prices, and consumer prices are expected to rise further, with shoppers potentially holding off on purchases of essentials like new clothes and shoes to save money elsewhere.
“We continue to be encouraged by the momentum in North America, with strong orders coming in for the summer,” Friend said. “We’re seeing some positive signs and sales are strong. We’re not seeing consumer reaction to what’s happening in the Middle East or North America at the moment.”
Hill is focusing in part on boosting Nike’s business with wholesale partners rather than direct sales through its website and stores. Wholesale revenue increased 5% to $6.5 billion.
Meanwhile, direct sales declined 4% to $4.5 billion.
