After the earnings release, Nike shares have room to rise towards 78 USD

Nike reported its first profit growth in five quarters, although the strong results were partly supported by a one-off tariff refund. The base-case scenario suggests Nike shares could advance towards 78 USD after establishing a foothold above 47 USD.

Nike, Inc. (NYSE: NKE) reported mixed results for Q4 of the 2026 financial year. Revenue declined by 1% year-on-year to 10.97 billion USD, while earnings per share came in at 0.72 USD, with both figures exceeding market expectations. At the same time, earnings per share increased by 414% year-on-year, and gross margin expanded by 890 basis points to 49.2%.

However, the sharp improvement in earnings and gross margin was largely driven by a one-off import tariff refund worth 986 million USD. Excluding this effect, gross margin would have been approximately 40.2%, remaining broadly unchanged from the third quarter.

The business recovery, however, remains uneven. NIKE Direct sales fell by 7%, compared with a 4% decline in the third quarter, while the decline in revenue in Greater China accelerated from 7% to 12%. Offsetting this weakness were 3% growth in North American sales and a 4% increase in wholesale revenue.

Following the earnings release, Nike shares initially fell by 4% as investors reacted to continued weakness in China and the company's forecast for a further decline in revenue during the first half of the 2027 financial year. However, by the close of trading, the stock had gained 3% as revenue and earnings per share exceeded market expectations despite the mixed results, while the wholesale business and gross margin showed early signs of stabilisation.

The rebound was also supported by the stock's previous sharp decline. At the time of the earnings release, Nike shares were trading around 75% below their all-time high, meaning that better-than-expected results prompted renewed buying interest and a partial recovery in the share price.

This article examines Nike, Inc., explains the company's principal sources of revenue, reviews its quarterly financial performance, and outlines expectations for the first quarter of the 2027 financial year. It also provides a technical analysis of NKE and presents a forecast for Nike shares for the 2026 calendar year.

About Nike, Inc.

Nike, Inc. is a US-based company founded on 25 January 1964 by Phil Knight and Bill Bowerman under the name Blue Ribbon Sports before rebranding as Nike in 1971. The company designs, manufactures, markets, and sells athletic footwear, apparel, accessories, and equipment. Its primary business segment is athletic footwear, which generates most of its revenue. Nike produces goods for a variety of sports, including running, basketball, football, tennis, golf, and fitness.

The company was listed on the NYSE on 2 December 1980 under the ticker symbol NKE.

Nike, Inc.’s main revenue streams

Nike’s revenue is generated from various sources within its business operations, with a primary focus on key areas such as footwear, apparel, and equipment, as well as brand licensing and digital platforms. Nike’s main revenue streams are outlined below:

• Footwear sales: Nike’s largest source of revenue is footwear, including athletic sneakers, casual shoes, and specialised models for running, basketball, and fitness. In Q3 fiscal 2025, footwear remained the dominant category; however, quarterly data show a revenue decline in this segment, highlighting challenges related to excess inventory and competitive pressures.
• Apparel sales: this category encompasses sports and casual apparel, including T-shirts, shorts, tank tops, and outerwear. Apparel complements Nike’s footwear range and is a significant revenue stream, often related to seasonal demand and collaborations with sports companies.
• Sports equipment sales: Nike generates revenue from sports equipment, including bags, socks, gloves, and accessories. While smaller than the footwear and apparel segments, this category plays a supporting role in the brand’s ecosystem.
• Nike Direct: revenue from direct-to-consumer sales – including Nike’s website, mobile app, and physical stores –

falls under the Nike Direct segment. This channel prioritises direct sales to consumers, bypassing wholesalers. Digital sales remain a key focus for Nike, with continued investment in e-commerce.

Nike, Inc. Q3 2025 financial results

On 20 March, Nike released its Q3 2025 financial results for the quarter ended 28 February. Below are the key financial figures compared to the same period last year:

• Revenue: 11.27 billion USD (–9%)
• Net income: 0.79 billion USD (–32%)
• Earnings per share: 0.54 USD (–30%)
• Gross margin: 41.5% (–330 basis points)

Revenue by country:

• North America: 4.86 billion USD (–4%)
• Europe, Middle East, and Africa: 2.81 billion USD (–10%)
• Greater China: 1.73 billion USD (–17%)
• Asia Pacific and Latin America: 1.47 billion USD (–11%)

The company’s management attributed a 9% decline in revenue to a double-digit drop in sales in January and February, following a successful holiday season in December. China experienced the most significant slump, with sales falling by 17%. Despite growth in the workout and running apparel categories, Nike noted a decline in the sports style and Jordan brand segments, particularly in its classic footwear lines.

Nike’s management forecast a substantial revenue decline of 13.0–15.0% in Q4 of fiscal year 2025, ending on 31 May 2025, which exceeded analysts’ forecasts of 11.4–12.2%. The outlook reflected efforts to liquidate excess inventory and refresh outdated product lines amid external factors such as tariffs and economic uncertainty.

CFO Matthew Friend expected gross margin to decrease by 4–5 percentage points due to the active sell-off of old inventory and the introduction of new, innovative models, noting that Q4 fiscal 2025 would be the period with the most significant impact from these measures, after which pressure on revenue and margins was expected to ease in fiscal 2026.

Overall, Nike’s management described the quarter as a period of progress amid ongoing challenges, exceeding income expectations while continuing to face pressure on revenue and margins. For the upcoming quarter, they forecast a more substantial decline in sales and margins as part of a strategic business relaunch, with hopes for improvements in the fiscal year 2026.

Nike, Inc. Q4 2025 financial results

On 26 June, Nike released its Q4 2025 financial results for the quarter ended 31 May. Key financial figures compared with the same period last year are as follows:

• Revenue: 11.10 billion USD (–12%)
• Net profit: 0.21 billion USD (–86%)
• Earnings per share: 0.14 USD (–86%)
• Gross margin: 40.3% (–440 basis points)

Revenue by country:

• North America: 4.70 billion USD (–11%)
• Europe, Middle East & Africa: 3.00 billion USD (–9%)
• Greater China: 1.48 billion USD (–21%)
• Asia Pacific & Latin America: 1.58 billion USD (–8%)

Nike’s Q4 2025 report served as an indicator of a transitional phase in the company’s strategy. Despite weak financial results, management demonstrated confidence in the beginning of a recovery cycle. Revenue declined by 12% to 11.1 billion USD, and earnings per share fell by 86% to 0.14 USD. However, both figures exceeded market expectations and were positively received by investors.

Management identified Q4 as the low point in the implementation of the ‘Win Now’ transformation program. Inventory levels continued to decline, the retreat from aggressive discounting was underway, and the product portfolio was being reshaped with a focus on core sports categories. Under the leadership of new CEO Elliott Hill, management took steps to strengthen the brand’s position in key segments and reallocate internal resources.

The market responded to the report with a 14% rise in Nike shares. Analysts at JPMorgan, HSBC, Jefferies, and other investment houses raised their price targets, citing signs of a sustainable business turnaround.

For Q1 2026, Nike projected a mid-single-digit percentage decline in revenue, representing an improvement on previous market estimates. At the same time, the company anticipated gross margin compression of 350–425 basis points, driven by tariff costs and changes in the sales mix. According to CFO Matt Friend, Nike was prepared to offset up to 1 billion USD in additional tariffs by shifting some production out of China and introducing moderate price increases in the US, starting in autumn.

The restructuring strategy included personnel changes, a refocus on key product lines, optimisation of sales channels, and a return to a more sustainable distributor engagement model. The stabilisation of inventory levels (at approximately 7.5 billion USD) and growing interest in new collections confirmed positive momentum.

Despite continued revenue pressure in several regions (notably a 11% decline in North America and a 21% decline in China), the company was laying the groundwork for a gradual recovery in operational efficiency. With external risks easing and the planned initiatives being successfully implemented, Nike’s medium-term share price outlook was assessed as positive.

Nike, Inc. Q1 2026 financial results

On 30 September, Nike released its Q1 2026 financial results for the quarter ended 31 August. The key financial indicators, compared with the same period of the previous year, are as follows:

• Revenue: 11.72 billion USD (+1%)
• Net profit: 0.72 billion USD (–31%)
• Earnings per share (EPS): 0.49 USD (–30%)
• Gross margin: 42.2% (–320 basis points)

Revenue by region:

• North America: 5.02 billion USD (+4%)
• Europe, Middle East & Africa: 3.33 billion USD (+6%)
• Greater China: 1.51 billion USD (–9%)
• Asia Pacific & Latin America: 1.49 billion USD (+2%)

Nike’s quarterly report exceeded analyst expectations. Revenue totalled 11.72 billion USD, up 1% year-on-year and well above the expert forecast of 11.0 billion USD. Adjusted EPS came in at 0.49 USD, nearly double the expected 0.27 USD.

The stronger performance was driven primarily by the growth of wholesale sales and a recovery in demand in North America. Products in the running, training, and basketball categories performed particularly well. However, NIKE Direct sales fell by 4% year-on-year, while digital channel sales dropped by 12%. In China, demand remained weak, with no signs of improvement so far. Gross margin also declined to 42.2%, down 3.2 percentage points from the previous year, due to higher discounting, changes in channel mix, and rising costs, including customs tariffs. As a result, profitability declined, despite the strong figures for revenue and earnings per share.

For the upcoming quarter, Nike issued cautious guidance. The company expects revenue to fall by a few percentage points and gross margin to contract further by 3.0–3.75 percentage points, partly due to tariffs. Operating expenses (SG&A) in absolute terms are expected to continue rising, while the effective tax rate will be slightly above 20%. According to management, direct sales through Nike’s own channels are not expected to return to growth over the course of the 2026 financial year.

Nike, Inc. Q2 2026 financial results

On 30 September, Nike released its Q2 2026 financial results for the quarter ended 30 November. Below are the key financial metrics compared to the same period last year:

• Revenue: 12.43 billion USD (+1%)
• Net profit (non-GAAP): 0.79 billion USD (–29%)
• Earnings per share (non-GAAP): 0.53 USD (–32%)
• Gross margin: 40.6% (–300 basis points)

Revenue by country:

• North America: 5.63 billion USD (+9%)
• Europe, Middle East & Africa: 3.39 billion USD (–1%)
• Greater China: 1.42 billion USD (–16%)
• Asia Pacific & Latin America: 1.67 billion USD (–4%)

In Q2 2026, which ended on 30 November 2025, Nike’s revenue came in slightly above market expectations, but profit quality remained weak. Revenue stood at 12.43 billion USD, rising 1% year-over-year and exceeding the consensus. EPS reached 0.53 USD, also ahead of analysts' estimates.

The primary issue of the quarter was a sharp drop in profitability. Gross margin declined to 40.6%, down 3 percentage points from the previous year. Net profit fell by 32% to 792 million USD. According to the company’s non-GAAP data, operating profit dropped by nearly one-third, and operating margin fell to 8.0% from 11.3% a year earlier.

Sales structure shifted towards the wholesale channel, which grew by 8%, generating 7.5 billion USD in revenue, but this is a lower-margin business. NIKE Direct sales fell by 8%, with digital sales down 14% and branded stores down 3%. This suggests that the primary high-margin revenue source has not recovered, and revenue growth is driven by the less profitable channel.

Additional pressure came from regional dynamics. In Greater China, operating profit was nearly halved, and China continued to significantly drag down overall results. North America fared better, but still saw lower operating profit compared to the previous year.

The company directly explained the reasons for the margin decline: results were heavily affected by higher tariffs in North America, clearance sales to reduce inventories, and the restructuring of the product range and sales channels. At the same time, Nike increased marketing expenses by 13%. The CFO clarified that new tariffs add approximately 1.5 billion USD in annual costs, creating serious pressure on gross margin, which will not fully disappear in the coming quarters.

The forecast for Q3 2026 remains cautious. The company expects revenue to drop by low single digits, continued pressure on gross margin, and increased expenses due to marketing and investments.

Overall, while Nike continues to perform better than market expectations in terms of revenue, its margin and operating profit are deteriorating, and the company pre-warns of a challenging upcoming quarter due to tariffs and ongoing business restructuring.

Nike, Inc. Q3 2026 financial results

On 31 March, Nike released its Q3 2026 financial results for the quarter ended 28 February. Below are the key financial indicators compared with the same period of the previous year:

• Revenue: 11.28 billion USD (+0%)
• Net profit (non-GAAP): 0.52 billion USD (–35%)
• Earnings per share(non-GAAP): 0.35 USD (–35%)
• Gross margin: 40.2% (–130 basis points)

Revenue by country:

• North America: 5.03 billion USD (+3%)
• Europe, Middle East & Africa: 2.87 billion USD (+2%)
• Greater China: 1.62 billion USD (–7%)
• Asia Pacific & Latin America: 1.49 billion USD (+1%)

For Q3 of the 2026 financial year, Nike delivered mixed results. Revenue totalled 11.28 billion USD and remained broadly unchanged year-on-year, but was still slightly above market expectations of around 11.24 billion USD. Earnings per share reached 0.35 USD, also exceeding the consensus of 0.28 USD. In other words, the results formally came in above expectations, but it is still too early to describe this as a strong turnaround in the business.

The main issue of the quarter was once again declining profitability. Gross margin fell to 40.2%, 130 basis points below the level recorded a year earlier. Total NIKE, Inc. EBIT declined by 23% to 635 million USD, while the EBIT margin fell to 5.6%, compared with 7.3% a year earlier. Net profit also declined by 35% to 520 million USD.

The sales structure remains weak. The wholesale channel grew by 5% to 6.5 billion USD, while the higher-margin NIKE Direct segment declined by 4% to 4.5 billion USD. Digital sales fell by 9%, and sales through company-owned stores declined by 5%, indicating that revenue continues to be supported primarily by the less profitable wholesale segment.

Across the regions, North America delivered the strongest performance, with revenue increasing by 3%, while Greater China remained the weakest region, with revenue declining by 7%. Management warned that in Q4, the decline in sales in China could deepen to 20% due to inventory clearance and pressure from local brands.

The outlook for Q4 of the 2026 financial year remained cautious. Nike expected revenue to decline by 2–4%, although before the earnings release, the market had expected 1.9% growth. The company also warned that sales in Greater China could fall by 20%, while gross margin was expected to decline by a further 25–75 basis points. Overall, the conclusion for the quarter is straightforward: Nike is showing the first signs of revenue stabilisation, but the market has yet to see a sustained recovery in margins, NIKE Direct sales, or the Greater China business.

Nike, Inc. Q4 2026 financial results

On 30 June, Nike reported its Q4 2026 results for the quarter ended 31 May. The key financial metrics compared with the same period a year earlier are as follows:

• Revenue: 10.97 billion USD (-1%)
• Net profit : 1.07 billion USD (+407%)
• Earnings per share: 0.72 USD (+414%)
• Gross margin: 49.2% (+890 basis points)

Revenue by region:

• North America: 4.83 billion USD (+3%)
• Europe, Middle East & Africa: 2.98 billion USD (-1%)
• Greater China: 1.30 billion USD (-12%)
• Asia Pacific & Latin America: 1.60 billion USD (+1%)

Nike delivered mixed results for Q4 2026. Revenue declined by 1% year-on-year to 10.97 billion USD, although it slightly exceeded market expectations. Excluding the tariff refund, earnings per share were approximately 0.20 USD, also exceeding analysts' forecasts.

The sharp increase in net profit and gross margin was driven primarily by an expected import tariff refund of 986 million USD. The tariff refund added 0.52 USD to earnings per share and approximately 900 basis points to gross margin. Excluding this one-off item, gross margin would have been around 40.2%, remaining broadly unchanged from Q3.

Compared with the previous quarter, performance across the company's sales channels weakened. NIKE Direct revenue declined by 7%, compared with a 4% decline in the third quarter, while digital sales fell by 12% and sales through company-owned stores decreased by 7%. Wholesale revenue increased by 4%, although the growth rate eased slightly from 5% in Q3.

The outlook for the start of the 2027 financial year remains cautious. Nike expects revenue to decline by low single digits during the first half of the year, suggesting that a full recovery in sales and profitability will likely take longer to achieve.

Overall, Q4 did not confirm a sustained recovery in Nike's business. The wholesale channel and North America continued to perform well, but weakness in NIKE Direct and Greater China weighed on overall performance. The increase in profit primarily reflected the one-off tariff refund rather than a meaningful improvement in the company's underlying operations.

Analysis of key Nike, Inc. multiples

The table below presents Nike, Inc.'s key valuation multiples following Q4 2026, calculated using a share price of 41 USD.

Calculation basis:

TTM revenue: 46.398 billion USD

TTM net income: 3.108 billion USD

TTM EBIT: 3.850 billion USD

TTM depreciation and amortisation: 0.751 billion USD

TTM EBITDA: 4.601 billion USD

Operating cash flow: 1.694 billion USD

Capital expenditure (CAPEX): 0.646 billion USD

Free cash flow: 1.048 billion USD

Cash and cash equivalents: 7.563 billion USD

Short-term investments: 1.464 billion USD

Total liquidity: 9.027 billion USD

Current portion of long-term debt: 2.000 billion USD

Long-term debt: 5.942 billion USD

Total debt: 7.942 billion USD

Net cash position: 1.085 billion USD

Shareholders' equity: 14.865 billion USD

Enterprise value (EV): 59.705 billion USD

TTM net interest income: 50 million USD

FY2027 consensus EPS: 1.77 USD

Conclusion on Nike's valuation

Nike shares should currently be viewed as a recovery story. Based on the company's key valuation multiples, the stock continues to trade at relatively elevated levels, while the free cash flow yield is only 1.7%. In addition, the reported P/E ratio of approximately 19.6 is partly reduced by the one-off import tariff refund.

One of Nike's key strengths remains its robust balance sheet. Cash and short-term investments exceed total debt, meaning the company currently faces no significant risks to its financial stability. This reduces the likelihood of further deterioration in the company’s financial performance, although it does not eliminate the risk of continued share price volatility.

Overall, Nike shares represent a business turnaround opportunity. The upside potential remains intact, but it depends directly on the company's ability to increase earnings and free cash flow over the coming quarters.

Expert forecasts for Nike, Inc. stock

• Barchart: of 36 analysts, 11 rate Nike shares as Strong Buy, 2 as Moderate Buy, 20 as Hold, and 3 as Strong Sell. The highest price target is 90 USD, while the lowest is 23 USD.
• MarketBeat: of 36 analysts, 14 rate Nike shares as Buy, 19 as Hold, and 3 as Sell. The highest price target is 85 USD, while the lowest is 23 USD.
• TipRanks: of 25 analysts, 8 rate Nike shares as Buy, 16 as Hold, and 1 as Sell. The highest price target is 75 USD, while the lowest is 23 USD.
• Stock Analysis: of 38 analysts, 11 rate Nike shares as Strong Buy, 1 as Buy, 24 as Hold, 1 as Sell, and 1 as Strong Sell. The highest price target is 97 USD, while the lowest is 23 USD.

Nike, Inc. stock price forecast for 2026

On the weekly chart, Nike shares have traded within a descending channel and below the 200-period Moving Average since November 2023, indicating that the long-term downtrend remains intact. However, the Stochastic indicator is already in oversold territory, signalling the potential for a corrective rebound.

Additionally, during Q4 of the 2026 financial year, Nike reported its first profit growth in five quarters, while its results exceeded analysts' expectations. These factors also increase the likelihood of a recovery in Nike shares from current levels. Against this backdrop, the following scenarios outline the potential price movements for NKE shares in 2026:

The base-case forecast for Nike shares envisages a breakout above the 47 USD resistance level, followed by an advance towards 78 USD.

The alternative forecast for Nike stock assumes a further decline towards support at 30 USD. Buying interest is expected to strengthen around this level, potentially allowing NKE shares to recover towards the 47 USD resistance level. A breakout above this resistance could pave the way for a further advance towards 78 USD.

Risks of investing in Nike, Inc. stock

When investing in Nike, it is crucial to consider the risks that may negatively impact the company’s income and affect its investors. The main risks are outlined below:

• The impact of tariffs on profit margins: Nike has warned that higher tariffs on imports from China and Mexico could significantly reduce profit margins.
• Competition and loss of market share: Nike faces intense competition from brands such as New Balance and Adidas, which are strengthening their positions, particularly in casual footwear and retro model segments. This poses a threat to Nike’s market share.
• Economic instability: factors such as inflation, recession fears, and reduced purchasing power may lead to decreased consumer spending on sportswear and footwear, ultimately impacting Nike’s revenues.

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