Nike reported quarterly earnings after the bell on Tuesday in 2026, with adjusted EPS of 20 cents, beating Wall Street expectations of 13 cents; revenue of $10.97 billion, exceeding expectations of $10.86 billion, and gross margin up 8.9%. China's performance was weak but in line with expectations, with Nike's revenue in China falling from over $7 billion when Hill took office to $6 billion this quarter.
Nike Quarterly Earnings Key Data: EPS 20 Cents, Gross Margin Up 8.9%
The key quantitative data for this quarter's earnings are as follows:
Adjusted EPS: 20 cents, beating expectations of 13 cents (approximately 54% higher)
Revenue: $10.97 billion, exceeding expectations of $10.86 billion (approximately $130 million higher)
Gross margin: Up 8.9%, including a tariff refund of $986 million; even though analysts did not include the refund in their expectations, gross margin still increased.
North America market: Growing, 15 percentage points higher than the lowest point during Donahoe's tenure.
China market: $6 billion this quarter, weak but in line with expectations; over $7 billion when Hill took office.
World Cup Ad Battle: Nike 78 Million Clicks vs Adidas 7.8 Million Clicks
Nike provides jerseys for 12 World Cup teams, and its "Rip the Script" ad features celebrities such as Cristiano Ronaldo, Kylian Mbappé, LeBron James, Kim Kardashian, and K-pop singer Lisa, recording 78 million clicks last month, while Adidas' ad had 7.8 million clicks in the same period.
Hill said on the March 2026 earnings call that football will be Nike's next key growth area, stating that Nike is "leveraging the World Cup opportunity to drive the football market in the coming quarters." Swartz told Fortune that Nike's high World Cup visibility can directly boost jersey sales and, in the long run, is a brand opportunity to re-establish its leadership in the sportswear industry.
Swartz: China Profitability Plunged, Full-Price Sales Key to Margin Improvement
Morningstar senior equity analyst David Swartz told Fortune that China has historically been Nike's highest-margin region, and the sharp decline in profitability poses a major problem. Swartz explained that Chinese retailers are struggling to sell Nike products even with discounts, leading to inventory buildup that takes up shelf space that could otherwise hold new products.
He noted that the biggest concern for investors now is how long it will take for Nike to turn around in China, adding: "Ultimately, Nike needs to sell more products at full price and reduce discounts to improve profit margins." Nike also faces competitive pressure from Anta eating into its market share in China.
FAQ
What is the magnitude of Nike's EPS beat and the role of the tariff refund?
Nike's adjusted EPS this quarter was 20 cents, approximately 54% higher than the expected 13 cents. Gross margin increased 8.9% this quarter, including a nearly $1 billion tariff refund ($986 million); the article states that even though analysts did not include the refund in their expectations, gross margin still improved.
How much has Nike's China performance declined compared to when Hill took office?
Nike's revenue in China fell from over $7 billion when Hill took office in November 2024 to $6 billion this quarter. Morningstar analyst Swartz said that China has historically been Nike's highest-margin region, and the sharp decline in profitability places significant pressure on overall finances.
How big is the gap in clicks between Nike's World Cup ad and Adidas?
Nike's "Rip the Script" ad recorded 78 million clicks last month, while Adidas' ad had 7.8 million clicks in the same period, making Nike's clicks 10 times that of Adidas. Although Adidas is FIFA's official partner, Nike competes through team jersey sponsorships and ad campaigns.
