In the second quarter of fiscal 2026, Nike’s gross margin contracted by 300 basis points year-over-year, driven primarily by elevated import tariffs and higher production costs. To counteract the pressure, management implemented targeted price increases in key markets, accelerated cost-reduction programs across manufacturing and logistics, and shifted more production to Vietnam and Indonesia to mitigate U.S. levy impacts. These measures, together with ongoing negotiations for lower commercial duties, aim to recover margin headroom by the end of the fiscal year.

Total revenue grew by just 1% versus the prior year, while net income declined by more than 30%. The wholesale channel was the bright spot, posting an 8% increase, whereas Nike Direct sales fell by 8%, reflecting consumer caution in its owned retail network. International markets, which comprise over half of the company’s top line, showed declines of 1% in Europe, 16% in Greater China and 4% across Asia Pacific and Latin America. Footwear, accounting for roughly 60% of revenue, was flat, while apparel growth decelerated to 4%, underscoring the urgency of reinvigorating the core business.

Late in 2025, several executives, including the chief executive officer, purchased shares in the open market for the first time in years, signaling confidence in the turnaround strategy. Nonetheless, analysts have trimmed consensus targets by approximately 15% over the past quarter, and institutional investors shifted to net selling during the fourth quarter. With Q3 fiscal 2026 earnings due in mid-March, investors will be closely watching whether ongoing cost initiatives and channel optimization translate into stabilizing margins and revenue growth.