Nike (NKE, Financials) gave investors a better-than-expected quarter, but not enough to ease concerns about its recovery.
Shares fell more than 3% in premarket trading Wednesday after the company said sales could keep declining through the first half of fiscal 2027. That warning mattered more to the market than the earnings beat.
Revenue came in at $11 billion, slightly ahead of the $10.85 billion analysts expected. Adjusted earnings were 20 cents a share, topping estimates of 12 cents. Reported earnings were 72 cents a share, helped by a one-time tariff-related benefit.
The numbers were mixed beyond the headline beat. Total revenue fell 1% from a year earlier. Wholesale revenue rose 4% to $6.6 billion, but Nike Direct revenue dropped 7% to $4.1 billion. Digital sales fell 12%, and company-owned stores were down 7%.
China remains the biggest issue. Greater China sales fell 17% on a constant-currency basis, while Converse revenue dropped 32% to $244 million.
Nike is making progress in some areas, but investors want clearer signs that demand is turning. The next focus will be whether the company can stabilize China and return to growth in fiscal 2027.