Nike Hits $12.4 Billion As North American Wholesale Saves The Quarter

NIKE, Inc. beat Wall Street expectations in its fiscal Q2 2026, powered by strong North America wholesale momentum even as margins and profits came under pressure. Revenue landed at $12.4 billion, topping forecasts and growing 1% year over year on a reported basis, while diluted EPS of $0.53 beat analyst estimates despite falling sharply versus last year.

Revenue beats and EPS surprise

In fiscal Q2 2026, NIKE reported $12.4 billion in revenue, up 1% on a reported basis and flat on a currency-neutral basis, versus consensus expectations of around $12.2 billion. Earnings per share came in at $0.53, ahead of the roughly $0.37 forecast, representing an EPS beat of more than 40% even as earnings declined year over year.

Net income fell 32% to about $0.8 billion, reflecting margin pressure from higher product costs, tariffs, and a more promotional environment. Gross margin contracted by 300 basis points to 40.6%, weighing on profitability even as top-line results outperformed expectations.

North American momentum and channel shift

NIKE Brand revenues reached $12.1 billion, up 1%, driven primarily by growth in North America, partially offset by declines in Greater China and the APLA region. Wholesale was the standout: revenues climbed to $7.5 billion, up 8% on a reported and currency-neutral basis, fueled by stronger demand from key retail partners in North America.

By contrast, NIKE Direct—which includes owned stores and digital—declined to $4.6 billion, down 8% reported and 9% on a currency-neutral basis. The company cited a 14% drop in NIKE Brand Digital sales and a 3% decline in NIKE-owned stores, underscoring a strategic pivot back toward wholesale to drive reach and inventory efficiency.

Category and regional performance

Overall, NIKE revenues grew modestly, but the mix tells a more nuanced story. North America led recovery, benefiting from performance categories and key footwear and apparel franchises, while Greater China revenue declined in the mid-teens, pressured by weaker demand and inventory clean-up.

Analysts noted that performance and running categories showed renewed strength, while some classic footwear lines saw double-digit declines as the brand resets franchises and channels. This reflects NIKE’s broader “resurgence” strategy, which CEO Elliot Hill recently framed as a multi-quarter effort to restore sustainable growth and profitability.

Outlook and margin headwinds

Looking ahead, NIKE expects continued gross margin pressure in Q3, guiding to a decline of around 175–225 basis points as higher product costs and tariffs remain a drag. At the same time, the company plans to keep investing in demand creation and sports marketing, with SG&A forecast to grow at a low single-digit rate.

Despite the margin squeeze, management is leaning on North American wholesale momentum, product innovation, and tighter inventory to support a longer-term turnaround. The strong Q2 beat on both revenue and EPS gives NIKE more room to execute that plan, even as investors weigh near-term pressure in China and direct-to-consumer.