Nike’s fiscal fourth-quarter earnings and revenue surpassed Wall Street projections, despite facing a decline in sales within its crucial China market. The company reported adjusted earnings per share of 20 cents compared to the anticipated 13 cents and revenues of $10.97 billion, above the expected $10.86 billion. However, shares experienced an 8% decline in after-hours trading before recovering some losses.
A significant factor in the earnings result was an 8.9% increase in gross margin, attributed to a nearly $986 million tariff refund following a Supreme Court ruling that overturned many global duties enacted during the Trump administration. This refund contributed 52 cents to the reported earnings per share. By the end of the quarter, Nike had received over $300 million related to these claims.
For the quarter, Nike’s net income stood at $1.07 billion, or 72 cents per share, a notable rise from $211 million or 14 cents per share a year earlier. Revenue in North America, the company’s largest market, increased 3% to $4.83 billion, although it fell short of the $4.88 billion forecast. The Greater China market saw a 12% decline in sales to $1.30 billion, though it still exceeded the expected $1.24 billion.
CEO Elliott Hill emphasized Nike’s commitment to reclaiming its position in the China market, acknowledging ongoing challenges in sales, particularly in sportswear and Jordan streetwear. Looking forward, Nike anticipates stable earnings through the first two quarters of fiscal 2027 and slightly positive gross margins. The company continues to navigate macroeconomic pressures, including tariffs and rising fuel costs, while working toward a strategic business turnaround.
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