Nike reported fiscal 2026 third‑quarter results on March 31, 2026, with total revenue of $11.3 billion, essentially flat on a reported basis and down 3 % on a currency‑neutral basis. Earnings per share came in at $0.35, beating the consensus estimate of $0.31 by $0.04, a 13 % beat, while gross margin contracted 130 basis points to 40.2 % from 41.2 % in the prior quarter. The flat revenue picture masks a 35 % year‑over‑year decline in EPS, underscoring the impact of margin compression and the company’s ongoing restructuring efforts.
Wholesale revenue grew 5 % to $6.5 billion, driven by stronger demand in North America and a higher mix of high‑margin wholesale customers. In contrast, Nike Direct sales fell 4 % to $4.5 billion, reflecting a shift in the channel mix and a decline in the Converse brand, which has been a key growth driver in previous periods. Management guided that revenue for the current quarter will decline 2‑4 % and that China sales will fall 20 %, signaling a continued slowdown in the company’s largest international market.
The company’s guidance for fiscal 2026 Q4 projects a revenue decline of 2‑4 % and a 20 % drop in Greater China sales, while it expects gross margin to remain near 40 % as tariff pressures persist. Nike’s “Win Now” and “Save to Invest” restructuring programs are expected to continue impacting results through the end of the year, but management anticipates margin expansion beginning in the second quarter of fiscal 2027 as tariff relief takes effect and cost‑control measures mature.
CEO Elliott Hill said the quarter “took meaningful actions to improve the health and quality of our business” and that the company’s “comeback” is progressing, though it will continue to create near‑term pressure. CFO Matthew Friend noted that the company delivered results in line with expectations and that “Win Now” actions will keep affecting results through year‑end, but the company remains confident in its long‑term growth trajectory.
The 130‑basis‑point margin contraction is largely attributable to higher tariffs in North America, which have eroded pricing power. Despite flat revenue, the company’s focus on high‑margin wholesale and the gradual shift away from lower‑margin direct channels are expected to stabilize profitability. With margin expansion projected to resume in FY2027 Q2, investors will watch how quickly the company can translate cost‑control gains into earnings growth while navigating ongoing headwinds in China and the Converse brand.
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