Quick overview

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Nike (NKE) shares fell about 11%, closing at $58.71, the lowest level in seven months, following the release of its fiscal Q2 2026 earnings (quarter ended November 30, 2025).

Investors focused on the company’s ongoing challenges in Greater China and margin compression from higher tariffs, despite the company exceeding Wall Street expectations for revenue and earnings.

Highlights. Revenue: $12.43 billion, surpassing projections of approximately $12.22 billion and increasing 1% year over year. Diluted EPS: $0.53 (lower than last year due to reduced net income, but better than estimates of around $0.38). Net income: 32% lower than the previous year.

Tariffs, promotions, and inventory cleanup caused a 300-basis-point drop in gross margin to 40.6%. Regional distribution: North America: +9% (strong wholesale growth of about 20–24%). Persistent China Weakness: China, once a major growth engine, continues to lag due to low consumer confidence, fierce competition from regional brands (e.g., The g., Anta, Li-Ning), and excessive reliance on monobrand stores. According to CEO Elliott Hill, the region requires a “reset,” and progress has been slower than expected.

The estimated cost of new US tariffs is $1.5 billion, adding further pressure on margins. Cautious Guidance: Gross margins are projected to decline by 175–225 basis points, and Q3 revenue is expected to decrease by low single digits (worse than expected growth). Under CEO Elliott Hill’s “Win Now” strategy, which focuses on wholesale partnerships and product innovation (e.g., Nike is undergoing a multi-year turnaround.