Nike NYSE:NKE fell 3.80% in premarket after the sportswear giant reported fiscal fourth quarter revenues of $11.0 billion, down 1%. Diluted EPS came in at $0.72, including a $0.52 benefit from the expected recovery of IEEPA tariffs. Gross margin expanded 890 basis points to 49.2%, but roughly 900 of those basis points reflect the same $986 million tariff recovery. Stripping it out, the underlying margin picture was closer to 40.2%, in line with the previous year.
Nike Direct revenues fell 7% to $4.1 billion, with Nike Brand Digital down 12% and owned stores down 7%. Greater China contracted 12%. The bright spots were narrow. North America grew 3% and wholesale revenues rose 4% to $6.6 billion, suggesting the channel rebalancing toward wholesale is gaining some traction. Converse continued its slide, falling 32% to $244 million. For the full year, revenues were $46.4 billion, flat reported, with full year diluted EPS of $2.10, down 3%.
CEO Elliott Hill said the company took decisive actions in fiscal 2026 to reposition for long-term growth, pointing to progress in performance product, though he acknowledged continued top-line headwinds. Attention will turn to incoming CFO David Denton, who takes over from Matthew Friend in August, as investors look for signals on how the new finance leadership plans to approach the ongoing turnaround.