Nike Inc. Reports Fiscal 2026 Fourth Quarter and Full Year Results
NIKE, Inc. (NYSE:NKE) has released its financial results for the fourth quarter and full year ending May 31, 2026. The company reported a challenging quarter but highlighted strategic decisions aimed at laying a solid foundation for future growth.
1. Key Financial Highlights
Fourth Quarter Performance
- Revenues: Reported revenues for the fourth quarter were $11.0 billion, a slight decline of 1% on a reported basis and down 4% on a currency-neutral basis.
- NIKE Brand Revenues: $10.7 billion, flat on a reported basis and down 3% on a currency-neutral basis, primarily impacted by declines in Greater China and EMEA but offset by growth in North America.
- Wholesale Revenues: Increased to $6.6 billion, a 4% rise on a reported basis and 1% on a currency-neutral basis, driven mainly by North America.
- NIKE Direct Revenues: Dropped to $4.1 billion, a decline of 7% on a reported basis and 9% on a currency-neutral basis, with a notable 12% decrease in NIKE Brand Digital sales.
- Gross Margin: The gross margin for the fourth quarter increased significantly, reaching 49.2%, an increase of 890 basis points, attributed to the expected recovery of IEEPA tariffs. This recovery contributed approximately $986 million to gross margin, boosting earnings per share.
- Net Income: The company reported a net income of $1.1 billion, marking a staggering increase of 407% compared to the previous year. Diluted earnings per share stood at $0.72, benefiting significantly from the IEEPA tariff recovery.
Full Year Overview
- Annual Revenues: For the fiscal year, NIKE reported revenues of $46.4 billion, unchanged on a reported basis and down 2% on a currency-neutral basis.
- NIKE Brand Revenues: Increased slightly to $45.2 billion, a 1% rise on a reported basis but down 1% on a currency-neutral basis, with similar regional dynamics as in the fourth quarter.
- Converse Revenues: Experienced a significant decline, totaling $1.2 billion, a 31% drop on a reported basis.
- Gross Margin: For the year, the gross margin edged up to 42.9%, a modest increase of 20 basis points from the previous year.
- Net Income: The annual net income was recorded at $3.1 billion, a 3% decline year-over-year, with diluted earnings per share also down by 3% to $2.10.
2. Management Insights
Elliott Hill, President and CEO of NIKE, Inc., emphasized the company's commitment to strengthening its foundation and repositioning for long-term growth. He stated, "In fiscal 2026, we took decisive actions to strengthen the foundation of NIKE, Inc. and reposition our business for long-term growth."
Matthew Friend, CFO, acknowledged the challenging operating environment but expressed confidence in the company's financial discipline and strategic adjustments, focusing on managing the product portfolio and enhancing operational efficiency.
3. Cost Management and Shareholder Returns
Cost Management
- Selling and Administrative Expenses: These remained flat year-over-year at $16.1 billion, with a slight decrease in demand creation expenses due to reduced brand marketing expenditures.
- Effective Tax Rate: The effective tax rate for the fourth quarter was notably reduced to 19.6%, down from 33.6% the previous year, largely due to stock-based compensation and one-time items affecting the prior year's tax rate.
Shareholder Returns
NIKE has consistently returned value to its shareholders, returning approximately $609 million in dividends in the fourth quarter, reflecting a 3% increase from the prior year. Over the fiscal year, the company returned about $2.5 billion to shareholders, including $2.4 billion in dividends and $123 million in share repurchases.
4. Balance Sheet Overview
As of May 31, 2026, NIKE’s balance sheet showed:
- Inventories: Flat at $7.5 billion, reflecting a balanced approach to inventory management.
- Cash and Equivalents: Totaled $9.0 billion, slightly down from the previous year, impacted by dividends and capital expenditures.
5. Looking Ahead
NIKE’s management will host a conference call on June 30, 2026, at 2:00 p.m. PT to further discuss these results and outline future strategies. The company remains focused on navigating the challenging market landscape while leveraging its strengths in brand equity and consumer engagement.
In summary, while NIKE faced headwinds in fiscal 2026, it demonstrated resilience through strategic initiatives and operational efficiencies, setting the stage for potential recovery and growth in the subsequent fiscal periods.
