Nike Inc. (NYSE:NKE) stock edged lower in premarket trading Wednesday after the athletic apparel maker reported fourth-quarter revenue and earnings that topped Wall Street estimates but warned of continued weakness in key lifestyle categories and issued a cautious outlook.
The company’s biggest challenge remained its Nike Sportswear and Jordan Streetwear businesses, both of which posted double-digit sales declines during the quarter. Executives said a volatile macroeconomic environment and pressured consumer spending continued to weigh on discretionary purchases.
Fourth-Quarter Results
Nike reported fourth-quarter revenue of $10.97 billion, topping analysts’ estimate of $10.86 billion.
Revenue declined 1% from a year earlier on a reported basis and 4% in constant currency. Modest growth in North America was offset by weaker sales in Greater China, Europe, the Middle East and Africa, and Converse.
Nike Brand revenue was flat year over year at $10.7 billion. Nike Direct revenue fell 7% to $4.1 billion, while wholesale revenue increased 4% to $6.6 billion.
Performance categories, including running, training and football, posted mid-single-digit growth. However, Sportswear revenue fell by a double-digit percentage as consumer demand softened.
The company also recorded a one-time $986 million benefit from the recovery of tariffs imposed under the International Emergency Economic Powers Act. More than $300 million has been received in cash, with the remainder recorded as accounts receivable.
The tariff recovery helped lift gross margin by 890 basis points to 49.2%.
Adjusted earnings came in at 20 cents per share, exceeding analysts’ expectations of 13 cents per share.
Fiscal 2026 Highlights
Nike said its running business delivered five consecutive quarters of double-digit growth, adding about $1 billion in revenue during fiscal 2026.
Wholesale revenue increased 4% for the fiscal year, supported by double-digit growth in North America and improved performance among retail partners.
The company refreshed more than 15,000 wholesale retail locations globally and upgraded more than 150 Nike Direct stores with sport-focused formats. Nike said it plans to modernize half of its company-owned store fleet by the end of fiscal 2027.
Outlook Remains Cautious
Nike expects revenue to decline by a low- to mid-single-digit percentage over the coming quarters. Management said the second quarter is likely to be weaker than the first because of difficult year-over-year comparisons, elevated promotional activity in Europe, the Middle East and Africa last year, and the timing of North American wholesale shipments.
The company expects Sportswear and Jordan Streetwear sales to remain negative throughout fiscal 2027 before improving in the second half of the year.
Nike now expects gross margin expansion to begin in the first quarter of fiscal 2027, earlier than previously anticipated.
Its outlook assumes an additional 10% tariff through July, increasing to 15% afterward.
Management also expects growth to expand beyond running into training, basketball and ACG during fiscal 2027. The company plans to introduce more than a dozen new footwear models in the second half of the fiscal year to help revive its Sportswear business.
NKE Price Action: Nike shares were down 3.36 % at $39.67 during premarket trading on Wednesday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
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