Shares of Nike (NKE) fell in extended trading after the athletic apparel maker reported fiscal second‑quarter 2026 results. While Nike beat revenue and earnings estimates, ongoing pressure on margins and direct‑to‑consumer sales led to a year‑over‑year decline in its bottom line.
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Earnings per share came in at $0.53, which beat analysts’ consensus estimate of $0.38 but declined 32% year-over-year. Meanwhile, Q2 sales increased by 1% to $12.4 billion and beat analysts’ expectations of $12.21 billion.
Wholesale business remained the bright spot, with revenues rising 8% to $7.5 billion, driven largely by strength in North America. However, Nike Direct revenue fell 8% to $4.6 billion, weighed down by a 14% drop in digital sales and a 3% decline in company‑owned stores.
Importantly, gross margin fell 3% to 40.6%, mainly due to higher tariffs in North America.
Moving ahead, inventory levels improved, dropping 3% to $7.7 billion. Cash and short‑term investments ended the quarter at $8.3 billion, down $1.4 billion as dividends, share repurchases, bond repayments, and capital spending outpaced operating cash flow.
Is NIKE Stock a Buy, Sell, or Hold?
Overall, Wall Street has a Moderate Buy consensus rating on Nike stock based on 20 Buys and nine Holds, as indicated by the graphic below. The average NKE stock price target of $85.12 indicates 28.94% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
