Nike (NKE) Q2 2026 earnings summary

Executive summary

• Second quarter revenues reached $12.4 billion, up 1% year-over-year, with North America leading recovery and other geographies at varying stages of turnaround.

• Net income for the quarter was $792 million, down 32% from the prior year; diluted EPS was $0.53.

• The company is executing 'Win Now Actions' and 'Sport Offense' strategies, focusing on athlete-centered innovation, product diversification, and operational efficiency.

• Leadership changes were made to accelerate decision-making, with all geographies now reporting directly to the CEO.

• Management emphasized ongoing portfolio repositioning and realignment to drive long-term growth.

Financial highlights

• Q2 revenues up 1% reported, flat currency-neutral; excluding a $550M headwind from classic franchises, currency-neutral revenue grew 6%.

• Gross margin declined 300 basis points to 40.6%, mainly due to higher tariffs and inventory obsolescence in China.

• SG&A up 1% year-over-year, driven by higher brand marketing, offset by lower operating overhead.

• Demand creation expense rose 13% to $1.3 billion, while operating overhead expense decreased 4% to $2.8 billion.

• EBIT margin for the quarter was 8.0%, down from 11.3% last year.

Outlook and guidance

• Q3 revenues expected to be down low single digits, with modest growth in North America and continued headwinds in China and Converse.

• Q3 gross margins guided down 175-225 basis points, but would expand excluding 315 basis points of tariff impact.

• SG&A expected up low single digits in Q3 due to increased demand creation and sport offense investments.

• Management expects continued negative gross margin impact from tariffs, with an annualized gross incremental cost of about $1.5 billion.

• Actions to rebalance product mix and reposition digital channels are expected to weigh on revenues and profitability in the near term, especially in Greater China and Converse.