Key Stats
- Current Price: ~$45 (NKE, April 24, 2026)
- Q3 FY26 Revenue: $11.3B, flat YoY reported (down 3% currency-neutral)
- Q3 FY26 EPS: $0.35, down 35% YoY
- Q4 FY26 Revenue Guidance: Down 2% to 4%
- Q4 FY26 Gross Margin Guidance: Down ~25 to 75bps; Greater China guided down ~20%
- Full-Year Guidance: Deferred to Investor Day (fall 2026)
- TIKR Model Price Target: $91 (mid case)
- Implied Upside Over ~5 Years: ~103%
Nike Stock Q3 FY2026 Earnings Breakdown
Nike stock (NKE) reported Q3 FY26 revenue of $11.3B, flat on a reported basis and down 3% currency-neutral, with EPS of $0.35 as the company absorbed a deliberate 5-point revenue headwind from pulling unhealthy classic footwear inventory off the market.
North America was the clearest proof point in the quarter, with revenue growing 3% and wholesale surging 11% as sporting goods partners including DICK’S and Academy leaned into performance storytelling.
According to Elliott Hill, President and CEO, on the Q3 FY26 earnings call, February marked the first time in two years that Nike drove positive growth across all channels in North America simultaneously.
NIKE Running was the standout category, up over 20% in the quarter, with Hill pointing to it as the model for how the broader sport offense should execute across the portfolio.
EMEA revenue declined 7% as Sportswear weakness and elevated promotional activity offset double-digit running growth, with the region also absorbing traffic disruption tied to Middle East instability.
Greater China fell 10%, with management intentionally reducing wholesale sell-in to align with full-price demand and aggressively reduce aged inventory across digital platforms.
NIKE Direct declined 7% globally, with digital down 9% and NIKE stores down 5%, as the company continued to prioritize marketplace health over near-term channel volume.
A $230M restructuring charge tied to employee severance in supply chain and technology weighed on the quarter, reflecting Nike’s effort to reset a fixed cost base that had grown too large relative to its revised channel mix.
For Q4 FY26, management guided revenue down 2% to 4%, with North America expected to grow modestly and Greater China guided down approximately 20% as marketplace cleanup actions accelerate.
Full-year and long-term guidance were deferred to an Investor Day planned for fall 2026 at Nike’s Beaverton campus.
Nike Stock Financials
The Q3 FY26 income statement reflects a business still absorbing the margin and revenue costs of a multi-quarter cleanup, with operating profitability below prior levels but showing early signs of stabilization.
Gross margin contracted to 40.5% in the February 2026 quarter, down from 41.5% in the prior-year February 2025 quarter, driven primarily by 300 basis points of tariff impact in North America, according to CFO Matt Friend on the Q3 FY26 earnings call.
Operating income came in at $780M, roughly flat with the $790M posted in the prior-year Q3, as SG&A stepped down to $3.78B from $3.89B a year earlier.
Operating margin of 6.9% in Q3 FY26 compared to 7.0% in the prior-year period, masking the severity of the compression visible across the broader recovery arc.
The February 2025 quarter was the trough: operating income hit $790M on a 7.0% operating margin before recovering to $930M and 7.9% in Q1 FY26 and $1.01B and 8.1% in Q2 FY26.
The Q3 FY26 sequential step-down from $1.01B to $780M reflects the accelerated inventory cleanup and restructuring charge absorbed in the quarter, not a reversion in underlying trajectory.
Gross margin has sat in the 40% to 41% range across the four most recent quarters, compressing from 44.7% at the May 2024 quarter with no meaningful inflection yet materialized.
What Does the Valuation Model Say?
The TIKR valuation model prices Nike stock at $90.81 in the mid case, implying roughly 103% upside from the current price of ~$45, with an annualized return of 18.9% over approximately 4.1 years.
The mid-case assumptions embed a 4.5% revenue CAGR and a 6.9% net income margin, both modest relative to Nike’s historical profile, suggesting the model does not require a full return to prior peak economics to reach that target.
This earnings report does not change the investment case in a dramatic way: it confirms that North America is healing and that management is executing the cleanup deliberately, but also that the timeline is longer than initially telegraphed and that Greater China is a meaningful drag through at least fiscal 2027.
At roughly half the model’s mid-case target, Nike stock is priced for a scenario where the comeback stalls, not one where it succeeds, which means the risk/reward at current levels is skewed toward the upside for investors who believe the Win Now playbook eventually delivers.
The central question for Nike stock is whether the North America recovery is durable enough to carry the investment case while Greater China and EMEA work through extended, open-ended cleanups.
What Has to Go Right
- North America wholesale sustaining 11% growth into the summer order book, with management confirming strong order books and the first positive all-channel sell-through in two years as of February 2026
- NIKE Running’s 20%-plus Q3 FY26 growth expanding into football and training as the Sport Offense rolls out in spring 2027, converting one category’s playbook into a multi-sport margin driver
- Gross margin inflecting positively in Q2 FY27, as management committed on the earnings call, once tariff headwinds anniversary and Win Now cleanup costs roll off the P&L
- The $230M supply chain and technology restructuring charge delivering the fixed cost reset needed to underpin management’s return-to-double-digit-EBIT-margin target
What Could Still Go Wrong
- Greater China guided down approximately 20% in Q4 FY26, with management flagging that revenue headwinds continue into fiscal 2027 as sell-in is managed down to align with full-price demand
- EMEA exiting Q4 FY26 with elevated inventory and a promotional environment that has not cleared, compounded by Middle East traffic disruption management cannot control
- Gross margin stuck in the 40% to 41% range across five consecutive quarters with no quarterly expansion yet materialized despite management’s recovery narrative
- Full-year and long-term guidance deferred to fall 2026 Investor Day, leaving investors without a financial framework for two more quarters and increasing the risk of a reset at the event
Should You Invest in NIKE, Inc.?
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