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    NKE
    Earnings call· May 2026(Q4 FY26)

    NIKE Q4 FY26 earnings call NKE

    Jun 30, 2026 Source

    Executive summary

    NIKE, Inc. Q4 FY26 — Tariff Recovery Boosts Gross Margin Amidst Sportswear Headwinds

    NIKE's Q4 FY26 results were marked by a significant one-time tariff recovery benefit that boosted gross margins, while underlying performance showed continued strength in sport categories like Running and Global Football. However, the company faced ongoing headwinds in Sportswear and Jordan Streetwear, particularly in Greater China and EMEA, leading to overall revenue declines. Management is focused on strategic repositioning, supply chain optimization, and disciplined expense management to drive future profitability and long-term growth, with an Investor Day planned to outline the next phase of strategy.

    Highlights

    5

    • The performance business grew mid-single digits in FY26, with NIKE Running adding approximately $1 billion and gaining 5 points of market share in statement footwear in Western Europe and North America.

    • Wholesale revenue grew 4% for FY26, led by double-digit growth in North America, and over 15,000 wholesale spaces were refreshed globally.

    • Q4 gross margin was 49.2%, up 890 basis points year-over-year, driven by a one-time $986 million tariff recovery benefit.

    • North America Q4 revenue grew 3%, with wholesale up 10%, and EBIT increased 91% on a reported basis.

    • Foot Locker revenue growth and retail sales comps were positive for the first time in 4 years, indicating a strengthening partnership.

    Concerns

    5

    • Q4 reported revenue was down 1% (4% currency-neutral), with NIKE Direct declining 9% and NIKE Digital down 12%.

    • Sportswear declined double digits in Q4, impacting current discounting and future order books, and is expected to remain negative in FY27.

    • EMEA Q4 revenue was down 6%, with NIKE Direct declining 16% and wholesale down 1%, due to heightened inventory and promotional levels.

    • Greater China Q4 revenue declined 17%, with NIKE Direct down 14% and wholesale down 19%, as the market undergoes a comprehensive reset.

    • Q1 FY27 revenue is expected to be down low to mid-single digits, with Q2 seeing sequential deceleration due to tough prior-year comparisons.

    Guidance & targets

    15
    CategoryTargetConfidence
    Q1 FY27 Revenue
    down low to mid-single digits
    high materiality
    High
    Q1 FY27 Foreign Exchange Impact on Revenue
    no expected benefit from foreign exchange
    medium materiality
    High
    Q1 FY27 Gross Margin
    slightly positive
    high materiality
    High
    Q1 FY27 SG&A dollars
    flat
    medium materiality
    High
    Q1 FY27 Operating Overhead
    declining
    medium materiality
    High
    Q1 FY27 Demand Creation
    grows high single digits
    medium materiality
    High
    Full-year Tax Rate
    low 20% range
    medium materiality
    High
    Cumulative Earnings (Q4 FY26 - Q2 FY27)
    flattish over that time period, excluding the benefit from tariff recovery
    high materiality
    High
    Cumulative Revenue (Q4 FY26 - Q2 FY27)
    down low to mid-single digits
    high materiality
    High
    Gross Margin Expansion
    earlier beginning in Q1
    high materiality
    High
    Operating Leverage and Gross Margin
    positive operating leverage and gross margin in fiscal '27
    high materiality
    High
    Sportswear and Jordan Streetwear Trajectory
    continue to be negative this fiscal year with improvement expected in the back half
    high materiality
    Medium
    NIKE Direct Owned Fleet Elevation
    elevate 50% of our NIKE Direct owned fleet
    medium materiality
    High
    Tariff Rates
    incremental tariff rates of 10% continuing through the end of July and then increasing to 15% thereafter
    high materiality
    High
    China Local Product Creation Delivery
    delivering locally designed, developed and manufactured product in China
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    North America
    Led by performance categories, but saw deceleration in retail sales trends in late April, particularly in Sportswear and Jordan Streetwear. Wholesale growth driven by new and existing distribution, with positive Foot Locker comps for the first time in 4 years.
    NIKE Direct: down 6%NIKE Digital: down 5%NIKE stores: down 7%Wholesale: grew 10%EBIT (ex-tariff refund benefit): declined 1%Performance: strong double-digit growth (global football, running, kids, golf)Sportswear: down high single digitsRetail sales: decelerated in late AprilInventory: grew mid-single digitsUnderlying gross margin profitability (ex-tariff refund benefit): continued to improve year-over-year
    		3%3%—91%
    EMEA
    Working through heightened inventory and promotional levels, disruption in the Middle East, and a higher sportswear mix. Aggressive actions to reduce promotions led to improved full-price realization despite digital revenue decline.
    NIKE Direct: declined 16%NIKE Digital: down 24%NIKE stores: down 9%Wholesale: down 1%Performance: double-digit growth (running, global football, golf)Digital off-price: down over 50%Full price realization: 15-point improvementSportswear: declined double digitsTotal inventory dollars: up low double digits
    		-6%-6%—-8%
    Greater China
    Executing a comprehensive reset, focusing on sport and innovation, local approach, and marketplace reimagination. Inventory cleanup actions are ongoing, with revenue trends expected to be in line with recent performance in the near term.
    NIKE Direct: declined 14%NIKE Digital: down 25%NIKE stores: down 9%Wholesale: declined 19%In-season sell-through: improved sequentiallyAverage retail discounts: downFull price realization on digital: recoveringRunning: grew mid-single digitsGlobal football and tennis: up double digitsHouse of Innovation (Shanghai): posted double-digit growthInventory: down double digitsUnits: down double digits
    		-17%-17%—-20%
    APLA
    Mixed performance with strength in select territories and performance sports, offset by sportswear pressure. Focus on elevation and expansion, with strong comp sales growth where retail has been elevated.
    NIKE Direct: declined 3%NIKE Digital: down 8%NIKE stores: up 2%Wholesale: up 1%Running and Global Football: grew double digitsTennis and ACG: high single-digit growthInventory: grew high single digitsSequential improvement in closeout mix
    		-1%-1%—-1%

    Operational metrics

    35
    Running business growth
    $1 billionadded over 5 quarters
    FY26

    Added to the Running business over the last 5 quarters.

    Running market share gain
    5 pointsgained
    FY26

    Gained in statement footwear in Western Europe and North America.

    Wholesale revenue growth
    4%YoY
    FY26

    Led by double-digit growth in North America.

    Refreshed wholesale spaces
    15,000+
    FY26

    Number of spaces refreshed in wholesale doors around the world.

    Elevated NIKE Direct stores
    150+
    FY26

    Number of NIKE Direct stores elevated with sport-led experiences.

    Toma tournament reach
    10,000+ kids
    to date

    Grassroots tournament reached over 10,000 kids across 25 cities.

    Chinese High School Basketball League partnership
    600 teams
    current

    Partnership with the Chinese High School Basketball League.

    Jordan's The One tournament reach
    20 cities
    current

    Jordan's The One tournament in 20 cities around the world.

    After Dark Tour (Shanghai) reach
    7 cities50,000 runners last year
    Fall

    Running tour launched in Shanghai, expected to reach 7 cities this fall. Last year, 50,000 runners joined.

    Teammates in Sport Offense
    8,000
    current

    Number of teammates moved into vertical sport teams under the new operating model.

    Classic footwear franchises reduction
    $2 billiontaken out of the market
    FY26

    Amount of classic footwear franchises taken out of the market in FY26.

    One-time tariff recovery benefit
    $986 millionoffsetting IEEPA tariffs
    Q4 FY26

    Benefit recognized in Q4 FY26 related to recovery of claims for incremental tariffs paid under IEEPA.

    Revenue
    down 1%YoY
    Q4 FY26

    Reported revenue for the fourth quarter.

    Revenue
    down 4%YoY
    Q4 FY26

    Currency-neutral revenue for the fourth quarter.

    NIKE Direct decline
    9%YoY
    Q4 FY26

    NIKE Direct revenue decline in Q4.

    NIKE Digital decline
    12%YoY
    Q4 FY26

    NIKE Digital revenue decline in Q4.

    NIKE stores decline
    7%YoY
    Q4 FY26

    NIKE stores revenue decline in Q4.

    Wholesale growth
    1%YoY
    Q4 FY26

    Wholesale revenue growth in Q4.

    Gross Margin (ex-tariff benefit)
    40.2%down 10 bps YoY
    Q4 FY26

    Gross margin excluding the one-time tariff recovery benefit.

    SG&A
    down 2%YoY
    Q4 FY26

    Reported SG&A decline in Q4.

    Effective Tax Rate
    19.6%
    Q4 FY26

    Effective tax rate for Q4.

    EPS (ex-tariff benefit)
    $0.20
    Q4 FY26

    Earnings per share for Q4, excluding the tariff recovery benefit.

    Inventory
    flatYoY
    Q4 FY26

    Inventory level at Q4 end compared to prior year.

    Revenue
    flatYoY
    FY26

    Reported revenue for the full fiscal year.

    Revenue
    down 2%YoY
    FY26

    Currency-neutral revenue for the full fiscal year.

    Gross Margin (ex-tariff benefit)
    40.8%
    FY26

    Gross margin for the full fiscal year, excluding the tariff recovery benefit.

    Diluted EPS (ex-tariff benefit)
    $1.58
    FY26

    Diluted earnings per share for the full fiscal year, excluding the tariff recovery benefit.

    Severance charges
    $400 million
    FY26

    Severance charges incurred in FY26 to reposition the business.

    EMEA Digital off-price decline
    over 50%YoY
    Q4 FY26

    Decline in off-price digital sales in EMEA following aggressive actions to reduce promotions.

    EMEA Full price realization improvement
    15 points
    Q4 FY26

    Improvement in full price realization in EMEA due to reduced promotions.

    Greater China Inventory decline
    double digitsYoY
    Q4 FY26

    Inventory and units decline in Greater China.

    World Cup stories views
    1.5 billion
    first week of World Cup

    Views of various World Cup stories by the first week of the tournament.

    World Cup kit sales
    2.5xvs. same period in World Cup '22
    by start of tournament

    Kit sales by the start of the World Cup compared to the 2022 World Cup period.

    Mercurial cleated footwear launch
    fastest-selling 24-hour launch
    launch

    The Mercurial launch was the fastest-selling 24-hour launch for cleated footwear in NIKE Direct history.

    Football doors elevated
    5,000+
    current

    Number of football doors elevated around the world.

    Industry KPIs

    11
    MetricValueDetails
    China trajectoryQ4 revenue declined 17%%
    Effective tax rate19.6%%
    Inventory positionflat%
    Revenue by channelWholesale grew 4%, NIKE Direct was down 9%, NIKE Digital declining 12%, NIKE stores down 7%%
    Gross margin bridge49.2%%
    Revenue by geographyNorth America Q4 revenue grew 3%, EMEA, Q4 revenue was down 6%, Greater China, Q4 revenue declined 17%, APLA, Q4 revenue was down 1%%
    Operating margin sg aSG&A was down 2%, EBIT increased 91% (NA), EBIT down 8% (EMEA), EBIT down 20% (GC), EBIT declined 1% (APLA)%
    Store fleet door investmentrefreshed more than 15,000 spaces, elevated more than 150 stores, elevate 50% of our NIKE Direct owned fleetspaces/stores
    Tariff cost exposure recovery$986 millionUSD
    Wholesale order book directiontighten buys, reduce future sell-inN/A
    Franchise product cycle performanceRunning grew mid-single digits, global football and tennis were up double digits, Sportswear was down high single digits, Sportswear declined double digits, Running and Global Football grew double digits, Tennis and ACG high single-digit growth%

    Product announcements

    9
    ProductTypeDetails
    Aero-FITlaunch
    Tiempo and Phantom franchisesupdate
    new Mercuriallaunch
    NIKE Mindexpansion
    PEG 42launch
    Vomero Plus 2launch
    Radical Airflowlaunch
    Caitlin Clarklaunch
    Moon Shoelaunch

    Deals & partnerships

    2
    Shai Gilgeous-Alexanderathlete endorsement/partnership

    Shai Gilgeous-Alexander joined the NIKE Basketball family, allowing Converse to fully focus on its lifestyle business.

    Foot Lockerwholesale distribution partnership

    Partnership with Foot Locker showing positive revenue growth and retail sales comps for the first time in 4 years.

    Risks & headwinds

    5
    Complex macro environment impacting consumer spendingcurrent

    Sportswear declined double digits in the quarter with a similar decline in retail sales.

    Mitigation: Focused on what we can control, bringing each sport together across product, brand, marketplace and operations.

    Volatile operating environment with evolving tariff policiesnear term

    Incremental tariff rates of 10% continuing through the end of July and then increasing to 15% thereafter.

    Mitigation: Forecast based on stated tariff rate assumptions; tightly managing expenses and reallocating resources.

    Underperformance of Sportswear and Jordan StreetwearFY27, with improvement expected in the back half

    Expected to continue to be negative this fiscal year (FY27).

    Mitigation: Moving quickly to reposition both businesses, including introducing more than a dozen new footwear styles in H2 FY27.

    Heightened inventory and promotional levels in EMEAQ4 FY26

    Total inventory dollars were up low double digits.

    Mitigation: Actions in place to reduce supply and accelerate liquidation to improve marketplace health; digital off-price down over 50%.

    Challenging revenue trends in Greater Chinanear term

    Q4 revenue declined 17%.

    Mitigation: Executing a comprehensive reset, cleaning up inventory with partners, investing in must-win doors, and local product creation.

    Q&A highlights

    6

    How much R&D and innovation investment is going into Sportswear to drive future growth, especially given inventory pullbacks and focus on full-price selling, and how can performance success halo to Sportswear?

    Elliott Hill emphasized that sport is NIKE's point of differentiation and authenticity, creating a halo for Sportswear and Jordan. He highlighted the success of the Sport Offense in Running ($1B growth, 5 market share points gained) and Global Football (World Cup activation). For Sportswear and Jordan, $2 billion of classic franchises were removed in FY26. Dedicated teams are now focused on future innovation, with over a dozen new footwear styles leveraging innovation expected in H2 FY27, moving beyond retro styles to new silhouettes and community-driven approaches.

    “We understand the importance of getting both NIKE Sportswear and Jordan Streetwear back to growth. With that said, our point of differentiation or point of distinction, what creates authenticity for NIKE is our sport business. And that creates the halo over both of those brands.”

    asked by Adrienne Yih-Tennant · answered by Elliott Hill

    2 min read6 chapters

    Detailed Narrative

    01

    Sport Offense and Performance Momentum

    NIKE is building a stronger foundation through its "Win Now" priorities and new "Sport Offense" operating model, which has moved 8,000 teammates into vertical sport teams. This renewed focus on sport is fueling energy, with the performance business growing mid-single digits in FY26. NIKE Running, a key example, has delivered 5 consecutive quarters of double-digit growth, adding approximately $1 billion to the business in FY26 and gaining 5 points of running market share in Western Europe and North America.

    02

    Sportswear and Jordan Streetwear Challenges

    Despite performance gains, NIKE Sportswear and Jordan Streetwear continue to face challenges, with sell-through remaining negative and impacting discounting and future order books. These categories represent approximately half of NIKE's revenue, and repositioning them is critical for restoring sustainable top-line growth. Management expects these segments to remain negative in FY27, with improvement anticipated in the back half, driven by the introduction of more than a dozen new footwear styles in Sportswear.

    03

    Integrated Marketplace Transformation

    NIKE is rebuilding wholesale relationships, expanding outreach, and improving channel presence. Wholesale revenue grew 4% for the fiscal year, led by double-digit growth in North America, and over 15,000 spaces in wholesale doors have been refreshed globally. In NIKE Direct, the focus is on elevating user experience, leading with performance, and reducing discounting on NIKE Digital, while also elevating over 150 stores with sport-led experiences.

    04

    Greater China Reset and Local Focus

    Greater China remains a critical long-term growth market, where NIKE is executing a comprehensive reset. This involves returning to sport and innovation, adopting a more local approach to product creation, and reimagining marketplace operations to be more premium and culturally connected. While Q4 revenue declined 17%, in-season sell-through has improved, average retail discounts are down, and full-price realization on digital is recovering. Local product creation is expected to deliver locally designed products in Holiday '27.

    05

    Supply Chain Optimization and Cost Management

    The company is taking decisive actions across its supply chain to lower costs, streamline operations, and rightsize its distribution network. Resources from NIKE Direct technology teams are being redeployed to support the entire value chain, and investments are being made in advanced tools to improve speed, precision, and reliability. These efforts are expected to drive positive operating leverage and gross margin in fiscal '27, contributing to a trajectory back to double-digit margins.

    06

    World Cup Activation and Brand Momentum

    The World Cup served as a significant platform for NIKE, with a comprehensive "NIKE football universe" strategy generating 1.5 billion views of various stories by the first week. This activation, combined with new product launches like Aero-FIT kits and redesigned Tiempo, Phantom, and Mercurial franchises, led to 2.5x more kit sales compared to the 2022 World Cup period and the fastest-selling 24-hour launch for cleated footwear in NIKE Direct history with the Mercurial.

    AI-generated summary of the company’s earnings call. Not investment advice.