A Nike logo is displayed at a Nike store in Austin, Texas on February 5, 2026.
Brandon Bell | Getty Images
Actions of Nike fell on Tuesday after the retailer warned that its sales would decline for the rest of the calendar year, driven by an expected 20% decline in its key market of China in the current quarter.
Chief Financial Officer Matt Friend said during the company’s earnings conference call that Nike expects its sales for its current fiscal fourth quarter to fall between 2% and 4%, compared to Wall Street estimates of a 1.9% increase, according to LSEG.
For the duration of the calendar year, Friend said, the company expects sales to decline by a low single-digit percentage, driven by growth in North America and offset by decline in China. These prospects were not comparable to estimates.
Nike beat companywide expectations for both revenue and net income for its fiscal third quarter, but its guidance left investors with more questions about how long its turnaround will take. Friend also warned that Nike’s guidance was based on the current global economic situation – and could change given recent geopolitical volatility.
“We also recognize that the environment around us has become increasingly dynamic and that we may experience unanticipated volatility due to disruptions in the Middle East, rising oil prices and other factors that could impact input costs or consumer behavior,” Friend said. “We focus on what we can control.”
Shares fell more than 8% in extended trading.
Here are the results of the world’s largest sneaker company for its fiscal third quarter, compared to estimates from analysts surveyed by LSEG:
Earnings per share: 35 cents versus 28 cents expectedIncome: $11.28 billion versus $11.24 billion expectedThe company’s reported net income for the three months ended Feb. 28 was $520 million, or 35 cents per share. That’s down 35% from $794 million, or 54 cents per share, a year earlier. The drop came as Nike’s gross profit margin fell 1.3 percentage points to 40.2 percent, “primarily due to higher tariffs in North America,” the company said.
Sales remained stable at $11.28 billion, compared to $11.27 billion last year.
Although Nike beat expectations in terms of revenue and bottom line, the company showed a mixed picture regionally. Nike’s largest market in North America continued to show steady growth, with revenue up 3% to $5.03 billion, but that was just below Wall Street expectations of $5.04 billion, according to StreetAccount.
Meanwhile, Nike’s market in Greater China continued to contract, with revenue falling 7% to $1.62 billion in the quarter. Still, that total beat analyst estimates by $1.50 billion, according to StreetAccount.
Nike continues to work on a colossal turnaround under CEO Elliott Hill. About a year and a half into his tenure, Hill has made great strides in fixing parts of the business, but he made it clear that it would take time for the entire company to improve given the size and complexity of the retailer.
He reiterated that expectation Tuesday, saying in a press release that “the pace of progress is different depending on the portfolio.”
“The areas we prioritized first continue to generate momentum,” Hill said. “The work is not done, but the direction is clear, our teams are acting with focus and urgency, and our foundation is becoming even stronger to build NIKE’s future.”
Friend said Nike’s turnaround efforts “will continue to impact results throughout the calendar year.”
The group’s shares listed in Frankfurt fell 8.7% at the opening in Europe on Wednesday.
Nike’s recovery already came at a difficult time, as a global trade war undermined its efforts to improve profitability and boost sales to inflation-weary shoppers. But now the sports company will have to face a new war in the Middle East which has already led to a rise in gas prices and which is expected even higher consumer priceswhich could push shoppers to cut back on purchases of essential goods like new clothes and shoes to save money elsewhere.
“We continue to be encouraged by the momentum in North America. We have a strong backlog for the summer,” Friend said. “We’re seeing positive signs and we’re selling well. We’re not seeing a consumer backlash to what’s happening in the Middle East right now, in North America.”
Hill has focused in part on revitalizing Nike’s business with wholesale partners rather than direct sales on its website and in stores. Wholesale revenues rose 5% to $6.5 billion.
Meanwhile, direct sales fell 4% to $4.5 billion.
