Nike Inc. reported a significant hike in earnings for the fiscal fourth quarter ended May 31 due to tariff refunds while still seeing earnings before the benefit as well as sales top analyst estimates. Sales in the quarter were down 4 percent on a currency-neutral basis with a gain of 3 percent in North America unable to offset declines of 17 percent in Greater China and 6 percent in the EMEA region.

Sales of $11.0 billion in the fiscal fourth quarter compared with analysts’ consensus target of $10.86 billion.  Adjusted earnings per share of 20 cents exceeded analysts’ consensus estimate of 12 cents a share.

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For additional coverage of Nike’s fiscal fourth quarter from SGB Executive, including insight and observations from Nike, Inc. CEO Elliott Hill, see below.

EXEC: Nike CEO Sees Weakness in Sportswear and Jordan Streetwear Weighing on Turnaround

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Fiscal Fourth Quarter Summary
Revenues for Nike, Inc. were $11.0 billion, down 1 percent on a reported basis and down 4 percent on a currency-neutral basis.

  • Revenues for the Nike Brand were $10.7 billion, flat on a reported basis and down 3 percent on a currency-neutral basis, primarily due to declines in Greater China and EMEA, partially offset by growth in North America.
  • Wholesale revenues were $6.6 billion, up 4 percent on a reported basis and up 1 percent on a currency-neutral basis, primarily due to growth in North America, partially offset by declines in Greater China.
  • Nike Direct revenues were $4.1 billion, down 7 percent on a reported basis and down 9 percent on a currency-neutral basis, due to a 12 percent decrease in Nike Brand Digital and a 7 percent decrease in Nike-owned stores.
  • Revenues for Converse were $244 million, down 32 percent on a reported basis and down 34 percent on a currency-neutral basis, due to declines across all territories.

Gross margin increased 890 basis points to 49.2 percent, primarily due to the expected recovery of the IEEPA tariffs. The expected recovery of the IEEPA tariffs of $986 million increased gross margin by approximately 900 basis points.

Selling and administrative expense decreased 2 percent to $4.1 billion.

The effective tax rate was 19.6 percent, compared to 33.6 percent for the same period last year, primarily due to stock-based compensation and prior year one-time items that had an outsized impact on the tax rate because of lower pre-tax income in the prior year.

Fourth quarter net income was $1.1 billion, up 407 percent, and Diluted earnings per share was 72 cents, including a 52 cents benefit related to the expected recovery of the IEEPA tariffs.

Fiscal 2026 Summary
Nike, Inc. full-year revenues were $46.4 billion, flat on a reported basis and down 2 percent on a currency-neutral basis.

  • Revenues for the Nike Brand were $45.2 billion, up 1 percent on a reported basis and down 1 percent on a currency-neutral basis, primarily due to declines in Greater China and EMEA, partially offset by growth in North America.
  • Wholesale revenues were $27.5 billion, up 6 percent on a reported basis and up 4 percent on a currency-neutral basis.
  • Nike Direct revenues were $17.7 billion, down 6 percent on a reported basis and down 8 percent on a currency-neutral basis, due to a 12 percent decrease in Nike Brand Digital and a 4 percent decrease in Nike-owned stores.
  • Revenues for Converse were $1.2 billion, down 31 percent on a reported basis and down 32 percent on a currency-neutral basis, due to declines across all territories.
  • Gross margin increased 20 basis points to 42.9 percent.
  • Selling and administrative expense was flat compared to the prior year at $16.1 billion.
  • The effective tax rate was 20.3 percent, compared to 17.1 percent for the same period last year, primarily due to a prior year one-time, non-cash deferred tax benefit provided by U.S. tax regulations related to foreign currency gains and losses.
  • Net income was $3.1 billion, down 3 percent, and diluted earnings per share was $2.10, a decrease of 3 percent.

Balance Sheet Summary
Cash and equivalents and short-term investments were $9.0 billion, down approximately $0.1 billion from last year, as cash generated from operations, which includes approximately $0.3 billion of cash received from IEEPA tariff recoveries, was more than offset by cash dividends and capital expenditures.

Inventories for Nike, Inc. were $7.5 billion, flat compared to the prior year, primarily reflecting an increase in units, offset by shifts in product mix.

Shareholder Returns
Nike has a strong track record of returns to shareholders. In the fourth quarter, the company returned approximately $609 million to shareholders through dividends, up 3 percent from the prior year.

In fiscal 2026, the company returned approximately $2.5 billion to shareholders, including:

  • Dividends of $2.4 billion, up 5 percent from the prior year.
  • Share repurchases of $123 million, reflecting 1.8 million shares retired as part of the company’s four-year, $18 billion program approved by the Board of Directors.

Image courtesy Nike, Inc.