Nike Q4 Earnings Beat as Tariff Refund Lifts Margins
Nike Q4 earnings topped estimates as an IEEPA tariff recovery lifted margins and refocused traders on one-time gains versus weak China sales.
KEY TAKEAWAYS
- Q4 EPS was $0.72 and included a $0.52 benefit from an expected IEEPA tariff recovery.
- Revenue totaled $11.0 billion, down 1% reported and down 4% currency-neutral.
- Greater China sales fell 12% while Nike Direct declined 7%, underscoring demand weakness.
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NIKE, Inc. reported fiscal fourth-quarter results on June 30, 2026, with Nike Q4 earnings surpassing expectations as an expected recovery of IEEPA tariffs significantly boosted margins and earnings per share (EPS), despite declines in Greater China and NIKE Direct sales.
Quarter Results and Sales Mix
For the quarter ended May 31, 2026, Nike reported revenue of $11.0 billion, down 1% on a reported basis and 4% on a currency-neutral basis. The overall sales momentum remained subdued despite gains in some areas.
Nike Brand revenue totaled $10.7 billion, flat reported and down 3% currency-neutral, with declines in Greater China and Europe, Middle East, and Africa (EMEA) partly offset by 3% growth in North America. Greater China sales fell 12%, highlighting regional divergence as U.S. demand showed pockets of recovery.
By channel, wholesale revenue rose 4% reported to $6.6 billion, up 1% currency-neutral, while Nike Direct revenue declined 7% reported to $4.1 billion, down 9% currency-neutral. The shift toward wholesale improved the sales mix even as the direct-to-consumer business lost traction.
Full-year revenue reached $46.4 billion, flat reported and down 2% currency-neutral. Net income was $3.1 billion, down 3%, with diluted EPS also down 3% to $2.10.
Nike returned about $609 million to shareholders in the quarter and approximately $2.5 billion over fiscal 2026 through share repurchases and other distributions.
Tariff Recovery and Outlook
Nike’s fourth-quarter diluted EPS was $0.72, including a $0.52 benefit from the expected recovery of IEEPA tariffs. Gross margin rose 890 basis points to 49.2%, reflecting roughly a 900-basis-point boost from the tariff recovery. The company noted that this one-time policy benefit materially lifted reported earnings and margins, rather than signaling broad demand improvement.
A prior-quarter earnings transcript indicated management expects the first quarter of fiscal 2027 to be the last in which higher tariffs will significantly pressure gross margins year over year. This timeline, combined with the quarter’s regional and channel softness, suggests the tariff recovery was a timing-related boost while underlying sales, especially in Greater China and Nike Direct, remain challenged.
Nike scheduled an investor call for 5:00 p.m. ET to discuss the results.
