Nike (NKE) Stock Falls Below $40 as Weak Sales Overshadow Profit Surge in Q4 Earnings Tuesday

Quick overview

As investors turned their attention away from the company’s improved profitability and toward its slow revenue growth and ongoing difficulty in its primary sales channels, Nike’s stock fell precipitously.

Profit Jumps but Sales Growth Disappoints

Nike, Inc. shares fell more than 3%, dropping back below the $40 mark after initially rising in response to the company’s fourth-quarter fiscal 2026 results.

Nike reported fourth-quarter revenue of $11.0 billion, down 1% from a year earlier but ahead of analysts’ expectations. Net income surged 407% year over year to $1.1 billion, while diluted earnings per share climbed 414% to $0.72, reflecting significantly improved profitability.

Despite the earnings beat, investors focused on slowing sales growth. Full-year revenue totaled $46.4 billion, remaining flat on a reported basis and declining 2% on a currency-neutral basis. Fourth-quarter revenue also fell 4% on a currency-neutral basis.

Additional weakness came from Nike Direct, where fourth-quarter revenue declined 7% on a reported basis and 9% on a currency-neutral basis to $4.1 billion.

The market’s reaction suggests investors remain concerned about Nike’s ability to return to sustainable top-line growth. The post-earnings decline below $40 reinforces the stock’s long-term downtrend, which has remained intact since its 2021 peak despite the company’s substantial improvement in quarterly profitability.

NIKE Chart Monthly – The Downtrend Extend Further

NIKE, Inc. Fiscal 2026 Fourth Quarter and Full Year Results

• Full year revenues were $46.4 billion, flat on a reported basis and down 2 percent on a currency-neutral basis*
• Fourth quarter revenues were $11.0 billion, down 1 percent on a reported basis and down 4 percent on a currency-neutral basis
• Wholesale revenues for the fourth quarter were $6.6 billion, up 4 percent on a reported basis and up 1 percent on a currency-neutral basis
• NIKE Direct revenues for the fourth quarter were $4.1 billion, down 7 percent on a reported basis and down 9 percent on a currency-neutral basis
• Gross margin for the fourth quarter increased 890 basis points to 49.2 percent, including an approximately 900 basis point benefit due to the expected recovery of the International Emergency Economic Powers Act (“IEEPA”) tariffs
• Diluted earnings per share was $0.72 for the fourth quarter, including a $0.52 benefit related to the expected recovery of the IEEPA tariffs

“In fiscal 2026, we took decisive actions to strengthen the foundation of NIKE, Inc. and reposition our business for long-term growth,” said Elliott Hill, President and Chief Executive Officer, NIKE, Inc. “We made meaningful structural improvements to lay the groundwork for our Sport Offense across our team culture, innovative product, brand strength, and how we serve consumers in our countries and cities. While we continue to face top-line headwinds, we’re encouraged by progress in performance product and are focused on consistent execution, improved profitability and scaling our wins to realize our full potential.”

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Skerdian Meta

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Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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