Nike tops earnings estimates but shares fall as China sales plunge, tariffs hit profits

Nike on Thursday posted quarterly earnings and revenue that topped Wall Street's estimates, as strength in North America helped to offset a plunge in China sales.

The company's stock slid more than 4% in extended trading Thursday, as investors digested the weakness in China and the sustained hit Nike is taking from higher tariffs.

Here's what Nike reported for its second fiscal quarter of 2026, according to consensus estimates from LSEG:

The athletic apparel retailer said sales in North America rose 9% to $5.63 billion. But revenue in its Greater China market dropped 17% to $1.42 billion.

The sneaker company is just over a year into CEO Elliott Hill's turnaround strategy, focusing on regaining its growth and market share, clearing out old inventory and investing in wholesale relationships.

"NIKE is in the middle innings of our comeback," Hill said in a Thursday statement. "We are making progress in the areas we prioritized first and remain confident in the actions we're taking to drive the long-term growth and profitability of our brands."

The company said wholesale revenues climbed 8% to $7.5 billion during the quarter. But direct sales — which were a focus for Nike in the years before Hill took over and moved away from the strategy — fell 8% to $4.6 billion.

Nike has also been feeling the impact of tariff increases. It said Thursday that its gross margin decreased by 3 percentage points and inventories dropped 3% primarily due to higher tariffs.

Earlier this month, Nike underwent leadership changes to "remove layers," according to Hill. Under its "Win Now" strategy, the company announced that Chief Commercial Officer Craig Williams would leave the sneaker giant.

Hill called the shakeup a move "about growth and offense."

"Collectively, these changes amount to us eliminating layers and better positioning Nike to continue to have an impact the way only Nike can," Hill said in a statement at the time.

Nike shares have dropped more than 13% this year as of Thursday's close.