tapebrief
NKE · Q2 2026

NKE · Q3 2026 Earnings

Cautious

Nike, Inc.

Reported March 31, 2026

30-second summary

Q3 FY2026 revenue was flat YoY at $11.28B reported (-3% currency-neutral) — a clean beat versus the "down low single digits" guide — and gross margin at 40.2% (down 130bps) beat the -175 to -225bps guide band by ~45-95bps. But management guided Q4 FY2026 revenue down 2–4% and explicitly called Greater China down ~20% in Q4, a marked acceleration from this quarter's -10% currency-neutral. Two consecutive guide beats are real; the forward setup just got harder, and Hill's "win-now actions" completion bar slipped from prior framing to "end of calendar year."

Headline numbers

EPS

Q3 FY2026

$0.35

Revenue

Q3 FY2026

$11.28B

+0.0% YoY

Gross margin

Q3 FY2026

40.2%

Operating margin

Q3 FY2026

5.6%

Key financials

Q3 FY2026
MetricQ3 FY2026YoYQ2 FY2026QoQ
Revenue$11.28B+0.0%$12.43B-9.2%
EPS$0.35—$0.53-34.0%
Gross margin40.2%—40.6%-40bps
Operating margin5.6%—8.0%-240bps

Guidance

Nike beat Q3 revenue and gross margin expectations despite tariff headwinds; Q4 FY26 guidance implies revenue decline of 2–4% but Greater China expected to fall ~20%, signaling persistent regional weakness into fiscal year-end.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Revenue GrowthQ3 FY2026down low single digits$11.279B, 0% YoYbeat low single-digit decline guidanceBeat
Gross MarginQ3 FY2026down approximately 175 to 225 basis points40.2%significantly better than guided decline rangeBeat

New guidance

MetricPeriodGuideYoY
Revenue GrowthQ4 FY2026down 2% to 4%-13 to -15% YoY
Greater China Revenue GrowthQ4 FY2026down approximately 20%—
Gross MarginQ4 FY2026down approximately 25 to 75 basis points—
Tax RateFY 2026low 20% range—

Segment performance

Q3 FY2026
SegmentQ3 FY2026YoY
NIKE Brand$11.012B+1.0%
Converse$0.264B-35.0%
Footwear$7.353B+2.0%
Apparel$3.184B—
Wholesale Revenue$6.5B—
NIKE Direct Revenue$4.5B—
NIKE Brand Digital Decline-9%—
NIKE-Owned Stores Decline-5%—

Platform metrics

Q3 FY2026
SegmentQ3 FY2026
Inventory$7.5B

Profitability

Q3 FY2026
SegmentQ3 FY2026
Net Income Margin4.6%

Other KPIs

Q3 FY2026
SegmentQ3 FY2026YoY
North America$5.026B+3.0%
Europe, Middle East & Africa$2.874B+2.0%
Greater China$1.615B-7.0%
Asia Pacific & Latin America$1.49B+1.0%
Dividend Per Share$0.410—
Total Shareholder Returns$609M—

Management tone

Q4 FY2025 "90 days at a time" → Q1 FY2026 "progress won't be linear" → Q2 FY2026 "middle innings of our comeback" → Q3 FY2026 "comeback taking longer than we would like / win-now done by end of calendar year"

The original two-year Win-Now plan has now been explicitly extended through the calendar year, and management spent the prepared remarks naming the slippage out loud. Friend: "While our comeback is taking longer than we would like, we are confident we are on the right path." Hill said much the same in his own prepared remarks — "parts of it are taking longer than I'd like, but the direction is clear." The verbatim "longer than we would like" is the first time the slippage has been said in plain language rather than encoded in metaphor — last quarter's "middle innings" framing has been retired in favor of a date ("end of the calendar year") that is itself further out than anything the company committed to in Q4 FY2025. A management team that just beat both revenue and gross margin guides for the second consecutive quarter chose to extend the timeline rather than claim momentum. The signal is internal.

Greater China's framing hardened for the fourth consecutive quarter — and this time the hardening came with a number. Through Q4 FY2025 ("course correction") → Q1 FY2026 ("unique marketplace dynamics") → Q2 FY2026 ("reset… fresh way of thinking") China was described in adjectives. This quarter management put -20% on the Q4 guide. Friend: "We expect Greater China to be down approximately 20% in the fourth quarter, reflecting reduced sell-in that we highlighted last quarter, as well as accelerated actions to clean up the marketplace." The shift from describing China as needing "time" to quantifying a -20% Q4 — driven explicitly by reduced sell-in plus accelerated marketplace cleanup — is the single most material disclosure in the call. And the Q3 cn improvement from -16% to -10% was sell-in management, not demand recovery; the Q4 step-down to -20% is the proof.

The cost-structure narrative pivoted from "Win-Now cleanup" to "structural variabilization" — a different and larger workstream. Friend: "we will shift our supply chain network to become more of a variable cost versus the higher fixed cost structure we have today." Last quarter's COO appointment was framed as addressing "core operations running inefficiently"; this quarter management named the actual program (variable cost supply chain, structural fixed cost reduction), placing it as a multi-year initiative running alongside the Win-Now wrap-up. This is the second workstream that has been added to the recovery story without an updated EBIT-margin date.

The tariff disclosure got a forward date and an inflection commitment. Friend: "Assuming no significant changes, we expect the first quarter of fiscal 27 to be the final quarter where higher tariffs continue to be a material year-over-year headwind to gross margin." Pairing this with "We expect gross margin expansion to begin in the second quarter due to actions to mitigate tariffs and recovery of transitory impacts from wind now" — where "second quarter" refers to Q2 of the nine-month guidance window — puts the cleanest operational margin inflection point management has committed to since this began. But it sits several quarters out, and "assuming no significant changes" is doing meaningful work.

Recurring themes management leaned on this quarter:

Inventory health and marketplace cleanup as precondition for growthSport offense driving authenticity and halo effect over sportswearWholesale partnership acceleration and market share recoveryStructural cost reduction to variabilize P&L and restore margin healthIntegrated marketplace strategy replacing direct-first modelNorth America as proof point and momentum driver for comeback

Risks management surfaced:

Middle East disruption impacting traffic and consumer behaviorElevated promotional environment across EMEA marketplaceGreater China structural challenges and channel complexity requiring extended resetTariff environment uncertainty and potential further increasesSportswear business stabilization taking longer than expected with continued weakness in EMEA

Answers to last quarter's watch list

Q3 FY2026 gross margin vs. the -175 to -225bps guide. Gross margin came in down 130bps at 40.2%, beating the guide range by ~45-95bps — the cleanest beat of the recovery so far, though within roughly half a band-width. Friend attributed it to tariff mitigation actions and "recovery of transitory impacts" arriving earlier than planned.
Resolved positively
Greater China — does -16% mark the bottom or extend further? The Q3 print of -10% cn looks like sequential improvement, but management's Q4 guide of ~-20% says explicitly it is not the bottom. The Q3 improvement was driven by sell-in management to align with sell-through, not demand recovery — and the Q4 -20% step-down is explicitly attributed to further reduced sell-in plus accelerated marketplace cleanup. Four quarters into the China "reset," the operating cadence has not improved.
Resolved negatively
Nike Brand Digital and owned stores. Digital narrowed from -14% to -9% — a third consecutive directional improvement that argues the promotional cleanup is working at the digital channel level. Owned stores, however, deteriorated for the third consecutive quarter (-1% → -3% → -5%), confirming the physical-store traffic problem flagged in prior watches. The "premium destination" thesis works in pixels and not in stores. Status: Resolved positively (digital); Resolved negatively (stores).
Converse — fifth consecutive ~-25%+ quarter just printed. Q3 FY2026 came in at -37% cn (-35% reported), the worst print of the cycle and now six consecutive quarters at -25% or worse. No impairment review, strategic review, or restructuring charge disclosure was made this quarter beyond inclusion in the broader $230M severance charge. The trajectory is incompatible with the carrying value, and management's continued silence is itself the signal.
Resolved negatively
Whether a quantitative double-digit EBIT margin timeline emerges. No quantitative EBIT margin target was reinstated. Management instead deferred all full-year and long-term guidance to a fall investor day. The "Q2 of the guidance window" gross margin inflection commitment is the closest substitute — a directional anchor without a dollar or percent destination.
Continue monitoring
Whether the new COO produces visible structural cost actions. Yes — Friend disclosed the variable cost supply chain initiative and the "meaningful steps to reset our cost base," underpinned by a $230M severance charge primarily in supply chain and technology. This is the first concrete structural cost program named since the COO appointment last quarter. No total dollar size has been quantified yet, but the workstream is now official. Status: Resolved positively (program disclosed); Continue monitoring (sizing).

What to watch into next quarter

Q4 FY2026 Greater China — does -20% hold, or does the actual print come in worse? Management has explicitly anchored to ~-20%. A miss to -22% or worse would mean even the aggressive sell-in cut underestimated demand deterioration, and the China impairment conversation moves from theoretical to active.

Q4 FY2026 gross margin trajectory. Guide is down 25–75bps sequentially vs. Q3's 40.2%, implying 39.5–40.0%. A miss to the low end would meaningfully compress the gross margin inflection claim. A beat would extend the two-quarter operational margin recovery into three.

Whether the fall investor day produces a quantitative EBIT margin target with a date. Management has now deferred quantitative long-term guidance for five consecutive quarters. The investor day commitment is binding. If it arrives without a number, the credibility cost is substantial.

Converse — sixth consecutive quarter at -25%+ just printed, this one at -37% cn. Watch for impairment language, brand reset spend disclosure, or strategic review in Q4 FY2026 reporting. Continued silence at this magnitude is the strongest possible signal that an impairment is being deferred rather than avoided.

EMEA deterioration. EMEA went from -1% cn to -7% cn with inventory up double digits and management flagging elevated Q4 exit inventory. This is the segment most at risk of negative surprise in Q4.

North America deceleration sustainability. +9% → +3% cn in one quarter is a sharper move than the China and APLA improvements offset. A Q4 print of flat or negative North America revenue would invalidate the "NA momentum is the proof point" thesis that has anchored every prior quarter's bull case.

Q1 FY2027 tariff drag. Management committed to Q1 FY2027 as the "final quarter" of material YoY tariff headwind. Watch the Q4 FY2026 call for any extension language — the "assuming no significant changes" qualifier leaves room to slip this milestone like the Win-Now timeline.

Sources

  1. Nike Q3 FY2026 Press Release (Form 8-K Exhibit 99.1) — https://www.sec.gov/Archives/edgar/data/320187/000032018726000026/q3fy26exhibit991er.htm
  2. Nike Q3 FY2026 earnings call prepared remarks and Q&A (Elliot Hill, Matt Friend; analysts Lorraine Hutchinson/BofA, Adrienne Yee/Barclays, Simeon Siegel/Guggenheim, Michael Binetti/Evercore)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.