Nike revenue beats estimates as turnaround gains traction despite headwinds

Nike posted a fourth-quarter revenue of $11.0 billion, edging past Wall Street’s estimate of $10.86 billion and giving investors a fresh data point on whether Elliott Hill’s turnaround is taking hold. The company is still fighting weak demand, tariff pressure and a difficult competitive backdrop, but wholesale growth and a sharp jump in gross margin pointed to early progress.

For the three months ended in fiscal 2026, Nike said revenue slipped 1% from a year earlier on a reported basis and 4% on a currency-neutral basis. Wholesale revenue rose 4% to $6.6 billion, while NIKE Direct fell 7% to $4.1 billion, a split that underscores how much of the recovery is still coming through partners rather than Nike’s own stores and digital channels.

The margin picture was stronger. Gross margin climbed to 49.2% from 40.3% a year earlier, helped by about 900 basis points from the expected recovery of IEEPA tariffs. Diluted earnings per share came in at 72 cents, including a 52-cent benefit tied to that tariff recovery. Nike had warned in June 2025 that tariffs could add about $1 billion in costs, and it said it planned to offset the hit by shifting sourcing away from China, where it aims to cut footwear imports from roughly 16% to the high single-digit range by the end of fiscal 2026, along with selective U.S. price increases that began in fall 2025.

The full-year numbers showed how far the business still has to climb. Nike reported fiscal 2026 revenue of $46.4 billion, flat on a reported basis and down 2% currency-neutral. A year earlier, revenue fell 10% to $46.3 billion, including a fourth quarter that declined 12% to $11.1 billion. The comparison suggests the latest quarter was more of a modest improvement than a full recovery.

Hill, who took over in 2024, has been trying to pull Nike back toward sport after years of emphasis on lifestyle and fashion, restoring ties with wholesale partners and refocusing the brand on categories such as soccer and running. Nike has said its renewed Amazon partnership will launch in the fall, with a featured brand store centered on running, training, basketball and sportswear, and it has also been rebuilding relationships with DSW and Macy’s. Executives said holiday orders were improving sequentially.

Nike has been spending heavily on marketing ahead of the World Cup and said it sponsors 12 national teams, including the United States, France and Brazil, while also outfitting Team USA. Hill has argued that Nike wins when it is rooted in sport and has said the company is not being managed for “this quarter or next quarter” but for the long term. Investors are now looking for the next quarter to show whether the revenue beat reflects durable demand, cleaner inventory and stronger execution, or just a temporary lift from tariff accounting and wholesale restocking.