01—Abstract
Summary
Summary of the 8-K filed March 31, 2026. Cited figures are marked; the original filing is the authoritative source.
NIKE reported fiscal 2026 third-quarter results (quarter ended February 28, 2026) that were roughly flat on a reported basis, with revenue of $11.3 billiona, unchanged from a year ago.
On a currency-neutral basis, revenue fell 3 percent. Growth in North America and Wholesale was offset by declines in EMEA, Greater China, NIKE Direct, and Converse. Profitability weakened more sharply.
Gross margin fell 130 basis points to 40.2 percent, primarily due to higher tariffs in North America. Selling and administrative expense rose 2 percent, including employee severance costs. Net income fell 35 percent to $520 million, and diluted EPS declined to $0.35b from $0.54.
The EBIT margin contracted to 5.6 percent from 7.3 percent. Management characterized the quarter as in line with its expectations and said its "Win Now" actions will continue to weigh on results through the balance of the calendar year. The release does not include explicit forward guidance for revenue or earnings.
Cash and short-term investments declined about $2.3 billion to $8.1 billionc, as operating cash flow did not fully cover dividends, a bond repayment, capital expenditures, and share repurchases. Inventories were down 1 percent to $7.5 billion, and the Company paid about $609 million in dividends, up 3 percent. NIKE has raised its dividend for 24 consecutive years, though the margin pressure and cash decline are the central concerns for investors.
The key takeaway is that top-line stabilization is being achieved mainly through Wholesale and North America, while NIKE Direct, Greater China, EMEA, and Converse remain weak. Tariff costs are compressing gross margin, and profit is declining faster than revenue. Investors will likely focus on the pace of margin recovery, the trajectory of Direct and China revenue, and whether the balance sheet and dividend remain comfortably funded as the Win Now program plays out.
02—Key points
Key Highlights
- Q3 revenue was $11.3 billion, flat reported and down 3 percent currency-neutral. NIKE Brand revenue rose 1 percent reported but fell 2 percent currency-neutral.
- Wholesale revenue grew 5 percent reported to $6.5 billion, driven by North America, while NIKE Direct fell 4 percent reported to $4.5 billion, with NIKE Brand Digital down 9 percent and NIKE-owned stores down 5 percent.
- Gross margin declined 130 basis points to 40.2 percent, mainly due to higher tariffs in North America. Nine-month gross margin fell to 41.0 percent from 43.5 percent.
- Net income fell 35 percent to $520 million and diluted EPS fell to $0.35 from $0.54. EBIT margin compressed to 5.6 percent from 7.3 percent.
- Regional performance was mixed: North America grew 3 percent, while EMEA was down 7 percent and Greater China was down 10 percent on a currency-neutral basis. Converse revenue fell 35 percent to $264 million.
- Cash and short-term investments decreased about $2.3 billion to $8.1 billion, and long-term debt declined to $7.0 billion, reflecting a bond repayment and continued capital returns.
- Management stated that Win Now actions will continue to affect results through the balance of the calendar year, and that the Company remains confident in long-term profitable growth. No formal guidance was included in the release.
03—Questions
Frequently Asked Questions
Why did NIKE's profits fall so much more than its revenue?
Revenue was flat, but gross margin fell 130 basis points to 40.2 percent, largely due to higher tariffs in North America. Selling and administrative expense also rose 2 percent, including employee severance costs. Together these pressures reduced operating profit, with EBIT down 23 percent and net income down 35 percent.
Is NIKE's business recovering?
The results show partial recovery. Wholesale and North America are growing, and EMEA EBIT and Greater China EBIT both improved in the quarter. However, NIKE Direct, Greater China revenue, EMEA on a currency-neutral basis, and Converse are still declining. Management said the pace of progress varies across the portfolio and that the work is not finished.
Is the dividend at risk?
The dividend appears supported in the near term. NIKE declared $0.41 per share, up from $0.40, and has increased its dividend for 24 consecutive years. The Company returned about $609 million in the quarter. However, cash and short-term investments fell about $2.3 billion, so investors should monitor whether operating cash flow continues to cover dividends, capital expenditures, and buybacks.
What does the release say about the outlook?
The release does not include explicit revenue or earnings guidance. Management said the quarter was in line with its expectations and that Win Now actions will keep affecting results through the rest of calendar 2026. Investors should look to the earnings call for more detail on the outlook.
What are the main risks highlighted by the quarter?
Key risks include continued tariff pressure on gross margin, weakness in Greater China and EMEA, ongoing declines in NIKE Direct and digital sales, and the Converse brand's sharp revenue decline. The filing also notes that actual results could differ materially due to risks described in NIKE's SEC filings.
04—Continue