Nike Inc - Class B

Nike delivered a stronger-than-expected fiscal second quarter of 2026, posting diluted EPS of $0.53 against a consensus estimate of $0.38, a beat of 39.47%, even as the broader turnaround picture remained complicated. Revenue edged up 0.6% year-over-year to $12.43 billion, with the headline growth masking a sharp channel divergence: wholesale revenues surged 8% to $7.50 billion as CEO Elliott Hill's "Win Now" strategy deepened retailer partnerships, while Nike Direct fell 8% to $4.60 billion, underscoring how far the rebalancing effort still has to run. The most significant drag on profitability was tariff pressure in North America, which contributed to a 300 basis point gross margin contraction to 40.6% and a 32% year-over-year decline in net income to $792.00 million. Greater China remained a notable soft spot, with revenues sliding 17% to $1.42 billion. Hill, who recently purchased roughly $1 million in company shares on the open market, has described fiscal 2026 as the "middle innings" of Nike's comeback, with the company investing heavily in brand marketing while working through a dynamic and pressured operating environment.