Footwear giant benefits from higher wholesale sales, stronger margins, and disciplined cost management while positioning the business for long-term growth.
NIKE (NKE) reported fiscal fourth-quarter and full-year 2026 results that highlighted improving profitability despite continued pressure on revenue growth. The athletic apparel giant exceeded expectations on margins while emphasizing that its ongoing restructuring efforts are strengthening the business for sustainable long-term expansion.
Fourth-quarter revenue totaled $11.0 billion, down 1% year over year on a reported basis, while full-year revenue remained essentially flat at $46.4 billion. Growth in North America and the wholesale channel helped offset continued weakness in Greater China and Europe, the Middle East, and Africa (EMEA).
A bright spot during the quarter was Nike’s wholesale business, where revenue increased 4% to $6.6 billion, reflecting stronger demand from retail partners. However, NIKE Direct revenue declined 7% to $4.1 billion, driven by softer digital sales and lower traffic at company-owned stores. Meanwhile, Converse continued to struggle, with quarterly revenue falling 32%.
Profitability improved significantly during the quarter. Gross margin expanded 890 basis points to 49.2%, largely benefiting from the expected recovery of tariffs under the International Emergency Economic Powers Act (IEEPA). The tariff recovery contributed approximately $986 million, or roughly 900 basis points, to gross margin and boosted diluted earnings per share by $0.52.
Net income surged to $1.1 billion, a 407% increase from the prior year, while diluted earnings per share reached $0.72. Excluding the one-time tariff recovery benefit, management noted that ongoing cost discipline and operational improvements also supported earnings.
For the full fiscal year, Nike generated $3.1 billion in net income, or $2.10 per diluted share, slightly below the prior year as the company continued investing in product innovation and sports marketing while navigating a challenging consumer environment.
CEO Elliott Hill said Nike made “meaningful structural improvements” during fiscal 2026, strengthening its product pipeline, brand positioning, and organizational execution. CFO Matthew Friend added that the company remains focused on improving marketplace health, managing inventory, and enhancing operational efficiency.
Nike ended the fiscal year with $9.0 billion in cash and investments while returning approximately $2.5 billion to shareholders through dividends and share repurchases. As the company continues executing its long-term strategy, investors will be closely watching whether improving profitability and stronger wholesale performance can offset ongoing top-line challenges in key international markets.
