Nike Reports Q4 Profit Amid Tariff Refund Boost
Nike, the renowned US sportswear retailer, has reported a significant profit in the fourth quarter (Q4) of fiscal year 2026, driven largely by an anticipated tariff refund. Despite the positive earnings, the company continues to face challenges in China and Europe, leading to a decline in revenue in these regions.
The company’s full-year revenue for fiscal year 2026 stood at $46.39 billion, which was flat on a reported basis but declined by 2% on a currency-neutral basis. The Q4 revenue, on the other hand, fell by 1% on a reported basis to $10.97 billion and dropped by 4% on a currency-neutral basis.
Tariff Refund Boosts Nike’s Profit
The anticipated recovery of International Emergency Economic Powers Act tariffs provided a significant boost to Nike’s profit in the Q4. The company reported a gross margin increase of 890 basis points to 49.2%, with an approximately 900-basis point benefit from the tariff refund valued at $986 million. This resulted in a net income of $1.06 billion in the quarter, which is a four-fold increase from the same period last year.
The tariff refund benefit also contributed to an increase in diluted earnings per share to $0.72 from $0.14 a year earlier. This includes a $0.52 benefit related to the same tariff recovery.
Nike Brand Revenue Declines Amid Global Challenges
Nike Brand revenue was unchanged on a reported basis at $10.72 billion but declined by 3% on a currency-neutral basis. The decline was largely due to falls in Greater China and Europe, Middle East & Africa (EMEA) regions, which were offset by growth in North America.
The company’s wholesale revenue rose by 4% to $6.6 billion in the quarter, while revenue from Nike Direct – the company’s D2C division – decreased by 7% to $4.1 billion. This decline reflected a 12% drop in Nike Brand Digital and a 7% fall in Nike-owned stores.
Converse brand revenue fell by 32% to $244 million, with declines across all territories.
Regional Performance
By region, North America grew by 3% to $4.83 billion in Q4. Greater China, however, fell by 12% to $1.29 billion on a reported basis and declined by 17% on a currency-neutral basis. Footwear revenue in the region dropped by 13%.
EMEA revenue edged down 1% to $2.97 billion and was down 6% on a currency-neutral basis.
For the full year, revenue was flat on a reported basis at $46.39 billion and fell by 2% on a currency-neutral basis. Gross margin increased by 20 basis points to 42.9%. Net income declined by 3% to $3.10 billion, while diluted earnings per share also fell by 3% to $2.10.
Full-year wholesale revenue increased by 6% to $27.5 billion, while Nike Direct revenue declined by 6% to $17.7 billion. Converse revenue for the year fell by 31% to $1.2 billion.
Nike president and CEO Elliott Hill stated, ‘In fiscal 2026, we took decisive actions to strengthen the foundation of Nike and reposition our business for long-term growth. While we continue to face top-line headwinds, we are encouraged by progress in performance product and are focused on consistent execution, improved profitability and scaling our wins to realise our full potential.’
