Nike beats quarterly estimates as tariff recovery lifts profit

Investing.com -- Nike beat Wall Street estimates for fourth-quarter revenue and adjusted profit on Tuesday, helped by growth in its wholesale business and a one-time tariff-related benefit, even as its direct-to-consumer business remained under pressure.

The sportswear maker reported fourth-quarter revenue of $11.0 billion, ahead of analysts' average estimate of $10.85 billion.

The results offer some evidence that CEO Elliott Hill's turnaround plan is gaining traction, but are unlikely to fully ease investor concerns after nearly two years of uneven progress.

Investors have grown increasingly impatient for a sustained recovery in sales, particularly in Greater China, where demand remained weak, and at Converse, which continued to post steep revenue declines. While both businesses performed largely in line with expectations in the quarter, analysts are likely to remain focused on whether Nike can translate improvements in wholesale and profitability into durable top-line growth.

Adjusted earnings came in at 20 cents per share, topping estimates of 12 cents per share. On a reported basis, diluted earnings per share were 72 cents, including a 52-cent benefit from the expected recovery of tariffs under the International Emergency Economic Powers Act (IEEPA).

Quarterly revenue fell 1% from a year earlier. Wholesale revenue rose 4% to $6.6 billion, offsetting a 7% decline in Nike Direct revenue to $4.1 billion as digital sales fell 12% and sales at company-owned stores dropped 7%.

Gross margin expanded to 49.2% from 40.3% a year earlier, primarily due to a $986 million benefit from the expected tariff recovery, which added about 900 basis points to margin. Net income rose to $1.1 billion, from $217 million a year earlier.

Nike Brand revenue was flat at $10.7 billion, with growth in North America offset by declines in Greater China and Europe, the Middle East and Africa. Converse revenue fell 32% to $244 million.

For fiscal 2026, revenue was flat at $46.4 billion, while net income declined 3% to $3.1 billion, or $2.10 per diluted share.

CEO Elliott Hill said the company had strengthened its foundation during the year and was encouraged by improving momentum in performance products despite ongoing pressure on sales. CFO Matthew Friend said Nike remained focused on improving profitability and managing costs in a challenging retail environment.

Related articles

Nike beats quarterly estimates as tariff recovery lifts profit

Nvidia's new Alpamayo project: What it means for Tesla?

This sector is 'poised for a big, beautiful year': Truist

View Comments