Nike’s second-quarter gross margin contracted by 300 basis points year-over-year, driven largely by higher import duties on footwear components and finished goods. To combat these headwinds, the company has implemented price increases across key markets, accelerated cost-control programs and shifted a larger share of production to lower-tariff countries. Despite these measures, supply-chain adjustments have added complexity to inventory management, and analysts estimate that tariffs will continue to depress margins by at least 100–150 basis points through the remainder of fiscal 2026.

In Q2 of fiscal 2026, overall revenue rose by just 1% compared with the prior year period, with net income falling more than 30%. Wholesale channel sales climbed 8%, while Nike’s Direct-to-Consumer revenues declined by 8%, reflecting softer traffic in owned retail and digital platforms. Regionally, North America grew 9%, offsetting declines of 1% in Europe, 16% in Greater China and 4% in Asia Pacific & Latin America. Footwear, which typically represents about 60% of sales, was flat year-over-year, and apparel growth slowed to 4%, down from 7% in the first half of the fiscal year.

In late 2025, several senior executives, including the CEO, purchased shares in the company, signaling belief in the turnaround strategy despite widespread cuts to sell-side price targets. Institutional ownership stands at roughly 65%, though many large asset managers shifted to net selling in Q4. Upcoming Q3 fiscal 2026 results, due in mid-March, will be closely watched for signs of a sustainable recovery in gross margins and direct-to-consumer sales, and could determine whether the recent insider purchases were prescient or premature.