How quickly can NIKE Mind scale, and what innovations in the next 6-18 months are most exciting?

Elliott Hill stated that the full fruits of the Sport Offense teams' efforts, from brief to market, will be seen in Spring '27. He cited ongoing success in Running (PEG 42, Aero-FIT in apparel, Vomero Plus 2), ACG (Radical Airflow), and Football (Mercurial pack for Women's World Cup). He also mentioned Caitlin Clark's launch in Holiday '26 and scaling NIKE Mind beyond slides in Spring '27. He acknowledged it took time but expressed confidence in the team's ability to deliver a relentless flow of innovative products. “The first time you're going to see the product across all of the sports that the team's worked on from brief to the market will be spring '27. So that will be the first time you're going to see the fruits of those team's efforts.”

Elaborate on sequential sell-through trends for Performance vs. Sportswear, optimal mix, and bridge Q1/Q2 revenue guidance (down low-to-mid single digits, further moderation in Q2) relative to Q4's -1%.

Elliott Hill noted a strong start in March for sell-through, decelerating by mid-April due to consumer pressure, but a halo effect from the World Cup in June. He stated the optimal mix is consumer-driven, not predetermined. Matt Friend explained Q1's low-to-mid single digit decline is primarily due to FX no longer being a tailwind. Q2's sequential deceleration is attributed to tough comps from last year's high digital promotions in EMEA (now reduced by 50% in off-price) and unusually high North America wholesale shipments. “I think the biggest driver in Q1 versus Q4 is the fact that FX will no longer be a tailwind to revenue. Outside of that, we don't expect a meaningful change in the mix of the portfolio or anything else.”

More detail on China strategy, especially for DTC and digital, beyond physical fleet renovations.

Elliott Hill reiterated commitment to China, focusing on being premium, culturally relevant, and leading with Sport. He cited mid-single digit growth in Running and double-digit growth in Global Football/Tennis in Q4. The strategy involves reimagining the marketplace, elevating online and offline storefronts for consistent consumer experience, deep local partnerships, and local product creation (Holiday '27). Matt Friend added that full-price realization on digital is recovering due to aggressive promotion reduction, and the Shanghai House of Innovation grew double digits, reflecting success in elevated retail. “In-season sell-through has improved sequentially and average retail discounts are down. We are seeing recovery in full price realization on digital after more aggressive actions to reduce promotions over the last 2 quarters.”

NKE

NIKE (NKE) Q4 FY26 earnings call: guidance and Q&A

Earnings call· May 2026 (Q4 FY26)· Consumer Discretionary· Jun 30, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Q1 FY27 Revenue	down low to mid-single digits high materiality	Q1 · FY27	High
Q1 FY27 Foreign Exchange Impact on Revenue	no expected benefit from foreign exchange medium materiality	Q1 · FY27	High
Q1 FY27 Gross Margin	slightly positive high materiality	Q1 · FY27	High
Q1 FY27 SG&A dollars	flat medium materiality	Q1 · FY27	High
Q1 FY27 Operating Overhead	declining medium materiality	Q1 · FY27	High
Q1 FY27 Demand Creation	grows high single digits medium materiality	Q1 · FY27	High
Full-year Tax Rate	low 20% range medium materiality	FY27	High
Cumulative Earnings (Q4 FY26 - Q2 FY27)	flattish over that time period, excluding the benefit from tariff recovery high materiality	Q4 FY26 - Q2 FY27	High
Cumulative Revenue (Q4 FY26 - Q2 FY27)	down low to mid-single digits high materiality	Q4 FY26 - Q2 FY27	High
Gross Margin Expansion	earlier beginning in Q1 high materiality	Q1 · FY27	High
Operating Leverage and Gross Margin	positive operating leverage and gross margin in fiscal '27 high materiality	FY27	High
Sportswear and Jordan Streetwear Trajectory	continue to be negative this fiscal year with improvement expected in the back half high materiality	FY27	Medium
NIKE Direct Owned Fleet Elevation	elevate 50% of our NIKE Direct owned fleet medium materiality	FY27	High
Tariff Rates	incremental tariff rates of 10% continuing through the end of July and then increasing to 15% thereafter high materiality	Ongoing	High
China Local Product Creation Delivery	delivering locally designed, developed and manufactured product in China medium materiality	Holiday '27 · FY28	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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%

NKE operating KPIs by quarter

NKE operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Aug 2025 Q1 FY26	Nov 2025 Q2 FY26	Change vs prior quarter
Stores China	5,000+ With over 5,000 mono-brand stores in China, this will take investment, and it will take time. Source: earnings call transcript	5,000 As you know, it's a mono-brand marketplace with thousands of -- 5,000 doors with the teams working the presentation of our product at retail and we weren't making the investment in our store fleet, so our stores aren't compelling. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Aero-FIT	launch	by start of the tournament
Tiempo and Phantom franchises	update	Earlier in the year
new Mercurial	launch	before the tournament
NIKE Mind	expansion	spring of '27
PEG 42	launch	This quarter alone
Vomero Plus 2	launch	fall '26
Radical Airflow	launch	current
Caitlin Clark	launch	holiday '26
Moon Shoe	launch	this quarter

Deals & partnerships

Shai Gilgeous-Alexander athlete endorsement/partnership

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

Foot Locker wholesale distribution partnership

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

Risks & headwinds

Complex macro environment impacting consumer spending current

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 policies near 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 Streetwear FY27, 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 EMEA Q4 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 China near 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

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.