Earnings Preview: Nike (NKE) looks poised for a weak start to fiscal 2026

For Nike, Inc. (NYSE: NKE), fiscal 2025 has been a challenging year, marked by persistent weakness in quarterly revenue performance and profitability. As the company prepares to report its first-quarter results, estimates suggest that the slowdown extended into the early months of fiscal 2026. The sneaker giant has embarked on a company-wide transformation focused on a return to its roots in sport and performance, rather than lifestyle.

Estimates

Nike’s Q1 FY26 report is slated for release on Tuesday, September 30, at 4:15 pm ET. Analysts’ consensus earnings estimate is $0.27 per share, compared to $0.70 per share in the first quarter of fiscal 2025. The cautious outlook reflects an estimated 5.3% fall in Q1 revenues to $10.98 billion. The company has a strong track record of outperforming estimates, with earnings consistently beating in the past eight quarters.

Nike’s stock experienced significant volatility in 2025, almost matching the trend seen last year. Currently trading sharply below its 2021 peak and underperforming the broad market, NKE is one of the worst-performing Wall Street stocks. It has dropped about 8% in the past 30 days. As the management’s turnaround initiatives start showing results, investor sentiment is likely to improve.

Weak Q4

In the fourth quarter, net income plunged to $211 million or $0.14 per share from $1.50 billion or $0.99 per share in the year-ago quarter. At $4.47 billion, Q4 gross profit was down 21% year-over-year. The weak earnings performance reflects a 12% fall in fourth-quarter sales to $11.1 billion. Wholesale revenues were $6.4 billion, down 9%. Revenues of Nike Direct, the direct-to-customer channel launched a few years ago to boost digital sales, were down 14%. Currently, the company is busy ramping up its physical footprint while continuing to invest in Nike Direct.

From Nike’s Q4 2025 Earnings Call:

“As I step back and look at the overall progress against our Win Now actions by geography, momentum and confidence are building in North America and EMEA, APLA’s progress varies by individual country, and China will take longer due to the unique characteristics of the marketplace. We’ve been operating in China for over 4 decades, and our teams know how what is required to return to growth. We’re executing our plans and trending in the right direction, but a full recovery will take time.”

Road Ahead

Nike is optimistic about delivering a better performance this year, leveraging progress in its Win Now actions, a turnaround initiative aimed at restoring growth and brand momentum by sharpening execution across products and geography. Last month, the company announced a layoff that would affect nearly 1% of its corporate workforce. The move is part of the management’s strategy to realign the business with a focus on putting sport and sport culture back at the center.

Meanwhile, the company is facing operational and financial headwinds from the government’s new tariff regime, and it expects an incremental cost increase of around $1 billion from the import restrictions. That is not good for the business at a time when it is facing increased competition.

Nike’s shares traded slightly higher Tuesday morning, broadly in line with their 52-week average price of $72.06. The value has declined about 17% since last year.