After the market closed on March 31 local time, U.S. sportswear giant Nike, Inc. released its financial results for the third quarter of fiscal year 2026 ended February 28. Quarterly revenue reached $11.3 billion, flat year-on-year and broadly in line with expectations. On the profitability side, gross margin declined by 130 basis points to 40.2%, mainly due to higher tariffs in North America, while net income fell 35% to $500 million.
By region, revenue in Greater China declined 7% year-on-year to $1.615 billion in the third quarter. Nike Direct revenue in the region decreased by 5% (with Nike Digital down 21% and Nike-owned stores up 1%), while wholesale revenue fell 13%. Nevertheless, Greater China’s earnings before interest and taxes (EBIT) rose 11% year-on-year to $467 million. In addition, the running business in Greater China achieved double-digit growth during the quarter, while tennis, golf, and ACG also recorded growth.
“This quarter we took meaningful actions to improve the health and quality of our business. The pace of progress is different across the portfolio and the areas we prioritized first continue to drive momentum,” said Elliott Hill, President and Chief Executive Officer, NIKE, Inc. “The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of NIKE.”
We delivered third quarter results in line with our expectations, and our teams continue to execute with discipline,” said Matthew Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. “Win Now actions will continue to impact results over the balance of the calendar year, and we remain confident in our ability to position the Company for profitable growth long-term.
In terms of enhancing shareholder returns, Nike maintained a strong track record, including 24 consecutive years of dividend increases. In the third quarter, Nike returned approximately $609 million to shareholders through dividends, up 3% year-on-year.
In addition, the Group’s inventory stood at $7.5 billion, down 1% year-on-year, mainly reflecting a reduction in inventory units and changes in product mix, partially offset by higher product costs, primarily due to increased tariffs in North America.
— By region:
- North America: Revenue increased 3% year-on-year to $5.026 billion; EBIT declined 11% year-on-year to $981 million.
- Europe, Middle East and Africa (EMEA): Revenue rose 2% year-on-year to $2.874 billion; EBIT increased 7% year-on-year to $515 million.
- Greater China: Revenue declined 7% year-on-year to $1.615 billion; EBIT increased 11% year-on-year to $467 million.
- Asia Pacific and Latin America: Revenue increased 1% year-on-year to $1.49 billion; EBIT declined 4% year-on-year to $332 million.
— By segment:
- Wholesale: Revenue increased 5% year-on-year to $6.5 billion, primarily driven by growth in North America.
- NIKE Direct: Revenue declined 4% year-on-year to $4.5 billion, mainly due to a 9% decline in Nike Brand digital sales and a 5% decrease in Nike-owned stores.
— By brand:
- Nike: Revenue increased 1% year-on-year to $11.0 billion, with declines in EMEA and Greater China partially offset by growth in North America.
- Converse: Revenue declined 35% year-on-year to $264 million, mainly due to revenue decreases across all regions.
| Source: Official financial report, analyst conference call transcript
| Image Credit: Official website
| Editor: Luxeplace
