Nike (NKE) stock price falls after 2026 Q2 results

nike Shares fell more than 10% in premarket trading Friday morning as concerns about its performance in China outweighed the sportswear giant’s profits.

Nike on Thursday reported quarterly profit and sales that beat Wall Street expectations as strong performance in North America offset a sales decline in China.

The stock’s move comes as investors digest the continued hit from China’s reported economic downturn and increased tariffs Nike is facing.

Here’s what Nike will report in Q2 2026, according to LSEG consensus estimates.

Earnings per share: 53 cents vs. 38 cents expected Earnings: $12.43 billion vs. $12.22 billion expected

The sports apparel retailer announced that sales in North America rose 9% to $5.63 billion. However, sales in the Greater China market fell 17% to $1.42 billion.

The company reported net income of $792 million, down 32% from $1.16 billion in the year-ago period. Sales increased 1% from $12.35 billion to $12.43 billion.

German athleisure giant’s stock price adidas and puma Nike suffered a bit of a blow Friday morning as concerns about its performance spread to companies across the Atlantic.

Investors in Western consumer goods companies, including sportswear and luxury goods makers, have been closely monitoring the Chinese market, which has been volatile for some time after consumer demand sharply slowed in the wake of the coronavirus pandemic.

Adidas reported a 10% increase in revenue in China in its third quarter earnings report. Puma announced in its third-quarter earnings report that sales in the Asia-Pacific region fell 9% due to a “significant decline” in wholesale business in Greater China.

Just over a year after CEO Elliott Hill embarked on a turnaround strategy, Nike is focused on growing and regaining market share, clearing old inventory and investing in wholesale relationships.

“FY26 continues to be a year of action as we right-size our Classic business, return Nike Digital to a premium experience, diversify our product portfolio, deepen our connection with consumers, strengthen our partnerships, and realign our team and leadership,” Hill said on a conference call with analysts. “And I’m saying we’re in the middle of a comeback.”

“We are far from our potential,” he added.

Hill said that while Nike’s improvement in the Chinese market “has not occurred at the level or pace needed to drive broader change,” the country remains one of the company’s strongest long-term opportunities.

Nike expects sales to decline by low single digits in the fiscal third quarter, with growth to moderate in North America. The company also expects its gross profit margin to decline by 1.75 to 2.25 percentage points, including a 3.15 percentage point impact from tariffs.

The company said wholesale revenue rose 8% to $7.5 billion in the quarter. But direct sales, which Nike focused on in the years before Mr. Hill took over and moved away from that strategy, fell 8% to $4.6 billion.

Nike is also feeling the impact of the tariff hike. The company said Thursday that its gross profit decreased by 3 percentage points and inventories decreased by 3%, mainly due to the tariff hike.

The sneaker company also reported weakness in its Converse brand. Nike announced that Converse sales fell 27% in the first quarter, and on Thursday reported that the sneaker brand’s sales were down 30%.

Despite weaknesses in some parts of Nike’s business, the company highlighted some strengths and new initiatives going forward. CFO Matt Friend said on a conference call that Nike.com had its best Black Friday in history this year, due in part to the release of the Air Jordan Black Cat.

Nike also plans to launch a new shoe platform in January called Nike Mind, aimed at helping athletes perform and prepare for competition, Hill said on the conference call.

Nike is undergoing a larger internal shakeup under Hill.

Hill said Nike made a leadership change earlier this month to “remove layers.” The company has announced that Chief Commercial Officer Craig Williams will be leaving the sneaker giant as part of its “Win Now” strategy.

Hill described the revamp as a move “about growth and offense.”

“Taken together, these changes amount to eliminating layers and improving Nike’s position to continue to make an impact in a way that only Nike can,” Hill said in a statement at the time.

Nike stock had already fallen more than 13% since the beginning of the year as of Thursday’s close.

Citi analysts said in a note after the earnings update that Nike’s performance in China weighed on hopes for a broader recovery for the company.

“Management expects the weakness in China in the second quarter to continue for the remainder of (2026) as market conditions reset (albeit time consuming),” they said. “This leaves us cautious about the economic recovery (in 2027) and highlights the complex turnaround that is underway.”