NIKE Reports Q2 Fiscal 2026 Results: Revenue Up 1%, Net Income Down 32%

NIKE, Inc. reported its financial results for the second quarter of fiscal 2026, revealing revenues of $12.4 billion, a 1% increase from $12.35 billion in the same period last year. The company's net income for the quarter was $792 million, down 32% from $1.16 billion a year earlier, resulting in diluted earnings per share of $0.53, compared to $0.78 in the prior year. The decline in profitability was attributed to increased costs, particularly from higher tariffs in North America, which negatively impacted gross margins, decreasing by 300 basis points to 40.6%.

In terms of operational performance, NIKE's wholesale revenues rose to $7.5 billion, up from $6.9 billion, primarily driven by growth in North America. However, this was offset by declines in Greater China and Asia Pacific & Latin America. Direct-to-consumer sales fell to $4.6 billion, down from $5.0 billion, largely due to decreased traffic in NIKE Brand Digital. The company reported a 3% decrease in comparable store sales, indicating challenges in maintaining customer engagement.

The filing also highlighted significant changes in inventory levels, which increased by 3% to $7.7 billion compared to May 31, 2025. This rise was driven by higher product costs, including tariffs. NIKE's total selling and administrative expenses remained stable at $4.04 billion, reflecting a slight increase from $4.00 billion in the previous year. The company continued to invest in demand creation, with expenses rising 13% to $1.27 billion, as it seeks to support key product launches and enhance brand visibility.

Looking ahead, NIKE acknowledged the ongoing challenges posed by geopolitical dynamics, fluctuating foreign currency exchange rates, and evolving tariff policies, which are expected to exert pressure on gross margins. The company anticipates a gross incremental cost of approximately $1.5 billion annually due to new tariffs. Despite these challenges, NIKE remains focused on driving product innovation and enhancing consumer connections, with plans to reposition its digital and wholesale strategies to improve profitability in the long term.

As of November 30, 2025, NIKE had approximately 1.48 billion shares of common stock outstanding, with a market capitalization reflecting its position as a leading global athletic brand. The company continues to navigate a complex market landscape while aiming to deliver sustainable, profitable growth through strategic initiatives and operational efficiencies.