Nike Inc Earnings - Q4 2026 Analysis & Highlights
Nike Inc. Q4 2026 earnings call focused on foundational business restructuring through the "Sport Offense" operating model, mixed financial performance with margin stabilization, significant macroeconomic headwinds impacting consumer discretionary spending, and strategic repositioning toward premium, sport-led growth while managing near-term revenue pressures.
Key Financial Results
Full year fiscal 2026 revenue was flat on a reported basis and down 2% on a currency-neutral basis.
Q4 revenue declined 1% on a reported basis and 4% on a currency-neutral basis.
Gross margin for the full year was 42.9%, up 20 basis points versus the prior year, including a 210 basis point benefit from IEEPA tariff recovery; excluding this benefit, gross margin would have been 40.8%.
Q4 gross margin was 49.2%, up 890 basis points versus the prior year, driven by a 900 basis point benefit from tariff recovery; excluding this benefit, gross margin would have been 40.2%, down 10 basis points versus the prior year.
Full year diluted earnings per share was $2.10, down 3% versus the prior year; excluding tariff recovery benefit, EPS would have been $1.58.
Q4 earnings per share was $0.72, and excluding the tariff benefit was $0.20.
Inventory was flat versus the prior year with continued progress addressing aged inventory in Greater China.
A one-time benefit of $986 million was recognized in Q4 related to recovery of claims for incremental tariffs paid under IEEPA, with over $300 million collected in cash as of quarter-end.
Business Segment Results
North America Q4 revenue grew 3% with NIKE Direct down 6%, NIKE Digital down 5%, NIKE Stores down 7%, and wholesale up 10%.
North America EBIT increased 91% on a reported basis; excluding the tariff refund benefit, EBIT would have declined 1%.
North America continues to drive momentum in performance with strong double-digit growth in Global Football and Running, plus growth in kids and Golf; Sportswear was down high-single digits.
EMEA Q4 revenue was down 6% with NIKE Direct declining 16%, NIKE Digital down 24%, NIKE Stores down 9%, and wholesale down 1%.
EMEA continues to work through heightened inventory and promotional levels with disruption in the Middle East and a higher portfolio mix of Sportswear than other geographies.
EMEA had continued momentum in performance through Running, Global Football, and Golf, all growing double digits; off-price was down over 50% following aggressive actions to reduce promotions, resulting in a 15-point improvement in full price realization.
Greater China Q4 revenue declined 17% with NIKE Direct declining 14%, NIKE Digital down 25%, NIKE Stores down 9%, and wholesale declining 19%.
Greater China EBIT was down 20% on a reported basis.
Greater China inventory was down double digits with units also down double digits.
Running in Greater China grew mid-single digits and Global Football and Tennis were up double digits; the House of Innovation in Shanghai posted double-digit growth for the quarter.
APLA Q4 revenue was down 1% with NIKE Direct declining 3%, NIKE Digital down 8%, NIKE Stores up 2%, and wholesale up 1%.
Running and Global Football grew double digits in APLA with high-single digit growth in Tennis and ACG.
Wholesale revenue for the fiscal year grew 4%, led by double-digit growth in North America.
Nike Running delivered five consecutive quarters of double-digit growth and added roughly $1 billion to the Running business over that period.
Nike Running gained 5 points of market share in statement footwear across Western Europe and North America in FY 2026, more than any other top five brand.
Performance business grew mid-single digits in fiscal year 2026.
Nike Sportswear and Jordan Streetwear remain challenged with sell-through remaining challenged, impacting both current discounting and future order books.
Capital Allocation
The document does not contain specific information regarding dividends, share repurchases, capital expenditures, or debt payments for the period.
Nearly $400 million of severance charges were made to reposition and create a healthier foundation for the business.
Significant investments in physical marketplace with more than 15,000 spaces refreshed in wholesale doors around the world.
More than 150 stores elevated with sport-led experiences in FY 2026.
Plan to elevate 50% of NIKE Direct owned fleet by the end of the fiscal year.
Industry Trends and Dynamics
Global Football World Cup generated 1.5 billion views of Nike's various stories by the first week of the tournament.
Nike Football kits sales reached 2.5 times the number compared to the same period in World Cup 2022.
Mercurial became the fastest selling 24-hour launch for cleated footwear in the history of NIKE Direct.
Global Football grassroots tournament Toma reached more than 10,000 kids across 25 cities to date.
Chinese High School Basketball League partnership includes 600 teams.
After Dark Tour in Running reached 50,000 runners last year with a third being first-time runners.
Foot Locker revenue growth and retail sales comp with Nike was positive for the first time in four years.
Competitive Landscape
Nike gained 5 points of Running market share in statement footwear across Western Europe and North America in FY 2026, more than any other top five brand.
Nike is leading the conversation and shaping football culture through the Sport Offense, described as a strong early proof point.
Nike's differentiation comes from sport business authenticity which creates a halo over Sportswear and Jordan brands and differentiates Nike from fashion brands.
Macroeconomic Environment
Consumer is under pressure around the world with larger impact on Sportswear, which declined double digits in the quarter with similar decline in retail sales.
Operating environment became more challenging as the quarter progressed, with stronger start in March especially in North America, but deceleration in retail sales trends beginning mid-April.
Tariffs remain a dynamic cost headwind expected to continue looking forward.
Environment continues to be volatile including evolving tariff policies, ongoing disruption in the Middle East, oil prices, and other factors that could impact operating costs, consumer behavior, and weakness in store traffic and retail sales.
Company is not expecting the environment to improve meaningfully over the next six months.
Retail sales grew over the first six weeks of Q4 but deceleration occurred in late April, particularly in Sportswear and Jordan Streetwear.
Weakness in store traffic and retail sales is being monitored closely as a macroeconomic indicator.
Growth Opportunities and Strategies
Sport Offense operating model moved approximately 8,000 teammates into vertical sport teams with focus on consumer, innovative product, brand strength, and serving consumers in countries and cities.
Nike Running strategy has delivered five consecutive quarters of double-digit growth through focused consumer insights, product innovation, and retail elevation with EKINs and tech reps.
Nike Football World Cup activation created a full Nike Football universe with integrated storytelling across athlete stories, collaborator collections, innovation unveils, retail experiences, and local tournaments.
Marketplace elevation strategy includes refreshing wholesale doors, elevating NIKE Direct experiences, and discounting less on NIKE Digital.
Greater China reset includes returning to sport and innovation, taking a more local approach to product creation, building a territory level offense, and reimagining marketplace operations.
Local product creation in Greater China will deliver locally designed, developed, and manufactured product in holiday 2027.
Converse strategy sharpened with clearer focus on role within Nike Inc., especially with Chuck Taylor and Jack Purcell franchises, and allowing Converse to fully focus on serving creators through lifestyle business.
Nike Sportswear repositioning includes introducing more than a dozen new footwear styles in the second half with distinct consumer journeys, leveraging innovation with new silhouettes.
Sportswear team moving to community-driven approach on the ground working with local creators and authentic storytelling.
Supply chain optimization includes redeploying resources, investing in advanced tools and capabilities to improve speed, precision, and reliability in manufacturing and product movement.
Investor Day on November 16 and 17 will share the next phase of growth strategy.
Financial Guidance and Outlook
Revenue expected to be down low- to mid-single digits over the guidance period (Q4 FY2026 through Q2 FY2027), with Q2 having sequential deceleration from Q1.
Q1 reported revenues expected to be down low- to mid-single digits with no expected benefit from foreign exchange and currency-neutral revenue growth consistent with recent performance.
Gross margin expansion expected to begin in Q1, earlier than previously guided.
Q1 gross margin expected to be slightly positive.
SG&A dollars expected to be flat in Q1 with operating overhead declining while demand creation grows high-single digits.
Full year tax rate expected to be in the low 20% range.
Earnings expected to be flattish over the three quarter guidance period (Q4 FY2026 through Q2 FY2027), excluding tariff recovery benefit.
Tariff forecast based on incremental tariff rates of 10% continuing through end of July and then increasing to 15% thereafter.
Nike Sportswear and Jordan Streetwear expected to continue negative in fiscal year 2027 with improvement expected in the back half.
Growth expected to expand beyond Running into Training, Basketball, and ACG as Sport Offense scales across more sports.
Progress expected to continue to be uneven across the portfolio.
Company remains confident in actions to improve EBIT margins and increase cash flow from operations despite volatile environment.
Profitability expected to bottom before sales in Greater China market.
Organizational Changes and Leadership
Matthew Friend, EVP and CFO, is departing after nearly 18 years at the company, with Elliott Hill recognizing his contributions and commitment to ensuring a seamless transition.
Win Now Program and Structural Transformation
Win Now actions launched in December 2024 to rebuild the foundation of Nike and remain on track to sunset by end of calendar year.
Win Now sequence included focus on culture, reigniting brand with emotional and inspiring consumer connections, focusing on product portfolio with steady flow of innovative products, and executing in countries and cities.
Sunsetting Win Now sets up the company to run the Sport Offense going forward.
Company building for the decade to come, not for the next quarter or year.
