NIKE Reports 35% Q3 Net Income Decline Amid Flat Revenue and Gross Margin Pressure

summarizeSummary

NIKE, Inc. reported fiscal Q3 2026 results with flat revenues, a 35% decrease in net income and diluted EPS, and a 130 basis point decline in gross margin, driven by weakness in NIKE Direct and Converse.

check_boxKey Events

• Q3 Net Income Plunges 35%

  Net income fell to $0.5 billion, with diluted EPS also down 35% to $0.35 for the fiscal third quarter ended February 28, 2026.

• Revenues Flat, Currency-Neutral Down 3%

  Total revenues were $11.3 billion, flat on a reported basis but decreased 3% on a currency-neutral basis.

• Gross Margin Contracts

  Gross margin decreased by 130 basis points to 40.2%, primarily due to higher tariffs in North America.

• NIKE Direct and Converse See Significant Declines

  NIKE Direct revenues were down 7% currency-neutral, while Converse revenues plummeted 37% currency-neutral across all territories.

auto_awesomeAnalysis

The significant 35% year-over-year decline in net income and diluted EPS, coupled with a 130 basis point drop in gross margin, indicates substantial profitability challenges for NIKE. While overall revenues were flat, the 7% currency-neutral decline in NIKE Direct revenues and a steep 37% currency-neutral drop in Converse revenues highlight struggles in key strategic areas and subsidiary brands. This performance, coming after pre-earnings warnings and with the stock trading near its 52-week low, reinforces negative sentiment and suggests ongoing operational headwinds. Investors will be watching for signs of recovery in direct-to-consumer channels and overall profitability in upcoming quarters.