Nike (NKE) stock falls after Q2 2026 earnings

Nike shares fell more than 10% in premarket trading on Friday morning, as concerns about its performance in China outweighed the sportswear giant’s earnings beat.

On Thursday, Nike posted quarterly earnings and revenue that topped Wall Street’s estimates, as strength in North America helped to offset a plunge in China sales.

The stock movement comes as investors digest the weakness reported in China and the sustained hit Nike is taking from higher tariffs.

Here’s what Nike reported for its second fiscal quarter of 2026, according to consensus estimates from LSEG:

• Earnings per share: 53 cents vs. 38 cents expected
• Revenue: $12.43 billion vs. $12.22 billion expected

The athletic apparel retailer said sales in North America rose 9% to $5.63 billion. But revenue in its Greater China market dropped 17% to $1.42 billion.

The company reported net income of $792 million, a 32% drop from $1.16 billion in the prior-year period. Revenue rose 1% to $12.43 billion from $12.35 billion.

Shares of German athleisure giants Adidas and Puma also took a small hit on Friday morning, as concerns about Nike’s performance spilled over to companies across the Atlantic.

Investors in Western consumer discretionary companies, like sportswear and luxury goods makers, are closely monitoring the shape of the critical Chinese market, where consumer demand has been volatile for some time after slowing sharply in the wake of the Covid-19 pandemic.

Adidas reported 10% growth in China revenues in its third-quarter earnings report. In its third-quarter earnings report, Puma said sales in the Asia Pacific region fell 9% due to a “significant decline” in the Greater China wholesale business.

Nike is just over a year into CEO Elliott Hill’s turnaround strategy, focusing on regaining its growth and market share, clearing out old inventory and investing in wholesale relationships.

“Fiscal year ’26 continues to be a year of taking action to rightsize our classics business, return Nike digital to a premium experience, diversify our product portfolio, deepen our consumer connection, strengthen our partner relationships and realign our teams and leadership,” Hill said on a call with analysts. “And I say we’re in the middle inning of our comeback.”

“We’re nowhere near our potential,” he added.

Hill said Nike’s improvements in its China market are “not happening at the level or the pace we need to drive wider change,” though he said the country remains one of the company’s most powerful long-term opportunities.

Nike expects fiscal third quarter revenues to fall by a low single digit percentage, with modest growth in North America. It also anticipates gross margins will drop 1.75 to 2.25 percentage points – including a 3.15 percentage point hit from tariffs.

The company said wholesale revenues…