Shares of Nike Inc. dipped over 4 percent in after-market trading on Thursday despite the company beating earnings estimates and seeing improvement in North America in the second quarter of fiscal 2026.
Net income at the Beaverton, Ore.-based company fell 32 percent to $792 million from $1.16 billion in the year-ago period. Diluted earnings per share dropped to 53 cents from 78 cents. Net sales in the period tallied $12.43 billion, up 1 percent from $12.35 billion on a reported basis and flat on a currency-neutral basis.
The company’s second-quarter results beat Wall Street’s best guess. Analysts, on average, were expecting net sales of $12.22 billion and earnings per share of 38 cents, according to LSEG.
By business segment, the company said Nike brand’s second-quarter revenues were $12.1 billion, up 1 percent, primarily due to growth in North America, partially offset by declines in Greater China and APLA. Nike Direct revenues were $4.6 billion, a decline of 8 percent, due to a 14 percent decrease in Nike Brand Digital and a 3 percent decrease in Nike-owned stores.
As for Nike’s wholesale channel, which the company has steadily worked on rebuilding, revenues in the quarter were $7.5 billion, up 8 percent. And revenues for Converse were $300 million, down 30 percent on a reported basis, due to declines across all territories.
Nike said footwear revenues remained flat in the period at $7.7 billion. Apparel sales in the second quarter increased 4 percent to $3.9 billion.
Elliott Hill, president and chief executive officer at Nike Inc, said in a statement the company is in the “middle innings” of its comeback.
“We are making progress in the areas we prioritized first and remain confident in the actions we’re taking to drive the long-term growth and profitability of our brands,” Hill said. “Fiscal ‘26 continues to be a year of taking action through ‘Win Now,’ including realigning our teams, strengthening partner relationships, rebalancing our portfolio, and winning on the ground. We’re finding our rhythm in our new sport offense, and setting ourselves up for the next phase of athlete-centered innovation in an elevated and integrated marketplace.”
Matthew Friend, executive vice president and chief financial officer at Nike Inc, added that the company “demonstrated the resilience” of its portfolio in the second quarter by delivering modest top-line reported growth while managing headwinds.
“We are making the shifts required to position our portfolio for a full recovery and driving real-time decisions in service of the long-term health of our brands,” Friend said.
No guidance for the third quarter or the full year was provided.