Nike reported third quarter results on Thursday that beat estimates despite continued weakness in its China business and steep declines at Converse.
Net income at the Beaverton, Ore.-based company in the third quarter of fiscal 2026 fell 35 percent to $520 million from $794 million in the year-ago period. Diluted earnings per share dropped to 35 cents from 54 cents. Net sales in the period tallied $11.3 billion, flat from $11.3 billion on a reported basis and down 3 percent on a currency-neutral basis.
The company’s third-quarter results beat Wall Street’s best guess. Analysts, on average, were expecting net sales of $11.2 billion and earnings per share of 28 cents, according to LSEG.
By business segment, the company said Nike brand’s third-quarter revenues were $11 billion, up 1 percent, primarily due to declines in EMEA and Greater China, partially offset by growth in North America. Nike Direct revenues were $4.5 billion, a decline of 4 percent, due to a 9 percent decrease in Nike Brand Digital and a 5 percent decrease in Nike-owned stores.
As for Nike’s wholesale channel, which the company has steadily worked on rebuilding, revenues in the quarter were $6.5 billion, up 5 percent. And revenues for Converse were $264 million, down 35 percent on a reported basis, due to declines across all territories.
Nike said footwear revenues grew 6 percent in the period at $3.3 billion. Apparel sales in the third quarter declined 2 percent to $1.5 billion.
The company added that it spent $2.9 billion, up 3 percent, in Q3 due to employee severance costs and unfavorable changes in foreign currency exchange rates, partially offset by lower other administrative costs.
Elliott Hill, president and chief executive officer at Nike Inc, said in a statement that the third quarter was largely filled with “meaningful actions to improve the health and quality” of the business.
“The pace of progress is different across the portfolio and the areas we prioritized first continue to drive momentum,” Hill noted. “The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of Nike.”
Matthew Friend, executive vice president and chief financial officer at Nike Inc, added that the company continues to “execute with discipline.”
“Win Now actions will continue to impact results over the balance of the calendar year, and we remain confident in our ability to position the company for profitable growth long-term,” Friend added.
No guidance for the fourth quarter or the full year was provided.
