Numbers looked good on the surface. Market did not buy it. After hours Nike dropped 3% and honestly when you look closer it makes sense why.
Beat the Numbers. Still Fell.
Nike posted 20 cents per share on $10.97 billion in revenue. Estimates were 12 cents and $10.85 billion. Beat on both. Should have been a good night.
Was not.
Revenue was down 1.1% from last year. Small drop but still a drop. Investors looked past the headline beat and focused on that. Sales going backwards is not what a turnaround story is supposed to look like.
Stock is also down 77% from all time highs. Down more than 35% just this year alone. Prices not seen since 2014. When a stock is that beaten up a small earnings beat against lowered expectations does not move people.
The Profit Number Was Misleading
Net income came to $1.07 billion. Looks like a huge jump from $211 million a year ago. But almost all of that came from one thing.
Supreme Court struck down many of Trump’s import tariffs. Nike got a $986 million refund as a result. That added 52 cents per share to the quarter by itself.
That money is gone now. It does not repeat. Investors know this so they ignored most of the profit improvement. The underlying business without that refund looked pretty ordinary.
North America Fine. China Still Broken.
North America grew 3% to $4.83 billion. That actually missed analyst estimates slightly which is not a good look for the home market.
China fell 12% to $1.30 billion. Still ahead of expectations but falling 12% in what used to be a key growth market is a real problem. Local Chinese brands have been eating Nike’s lunch there for a while now and nothing so far has reversed that trend.
CEO said the company is fully committed to winning China back. Fine thing to say. But they have been saying versions of that for several quarters. Market wants to see the numbers move not hear the commitment repeated.
Full Year Was Basically Flat
Fiscal 2026 total came to $3.11 billion or $2.10 per share. Slightly below last year. Not a disaster. Also not a recovery.
Flat to slightly down is what you get when a brand is still trying to figure out what it is again. Nike is not collapsing. But it is also not growing. And at a stock that has lost this much value the market needs actual growth to care.
What Changes the Story
Three things need to happen before investors get interested again.
North America needs to grow and beat estimates not just squeak past them. China needs to stop falling. And margins need to improve because the business is running better not because a court gave back tariff money.
Until those things show up the pattern will keep repeating. Beat expectations. Stock falls anyway. Because the expectations are low and one time items are doing the work that operations should be doing.