Nike delivered a better-than-expected fiscal fourth quarter on Tuesday, posting $10.97 billion in revenue against Wall Street’s $10.86 billion forecast and adjusted earnings of 20 cents per share versus the 13-cent consensus estimate. The results offered the first encouraging sign in months that CEO Elliott Hill’s turnaround plan is gaining traction — though China, Nike’s second-largest market, continued to disappoint with a 12% year-over-year revenue decline.
A major driver of the headline earnings beat was a tariff refund windfall: Nike expects a $986 million refund after the Supreme Court struck down many of President Trump’s global tariffs, contributing 52 cents to the company’s reported earnings per share of 72 cents. Analysts stripped this out of adjusted estimates, which is why the 20-cent adjusted figure was a clean operational beat. On core performance, North America revenue rose 3% to $4.83 billion, slightly below the $4.88 billion estimate. Greater China fell to $1.30 billion, though that beat the $1.24 billion forecast. Gross margin expanded 8.9% in the quarter. For full fiscal year 2026, net income came in at $3.11 billion ($2.10 per share), down modestly from $3.22 billion the prior year. Management guided for “flattish” earnings through the first two quarters of fiscal 2027, with slightly positive gross margin expected in Q1.
For investors, Nike remains a show-me story. The stock initially fell as much as 8% in after-hours trading before recovering most of those losses — a sign the market sees improvement but needs more evidence of a durable recovery. Hill has been methodically cutting discounts, reducing wholesale dependence, and refocusing Nike on performance sport. The China turnaround remains the biggest wildcard: the company admits “sell-through remains challenged” in key categories like Nike Sportswear and Jordan streetwear. Long-term investors who believe in Nike’s global brand power and eventual China rebound may view the post-earnings dip as an entry opportunity. But near-term, the stock needs visible China momentum before a meaningful re-rating occurs.
