Nike Stock Sinks as Margin Pain Spooks Investors

Nike ( (NKE) ) has fallen by -13.38%. Read on to learn why.

Nike shares tumbled 13.38% over the past week as investors reacted to a disappointing set of fiscal Q2 2026 results that exposed deepening pressure on profits, even though the company beat Wall Street’s expectations. Earnings per share dropped 32% year-on-year to $0.53, ahead of the $0.38 consensus, while revenue inched up just 1% to $12.4 billion. The market focused instead on shrinking margins and weakening key channels, triggering a sharp sell-off that pushed the stock close to its 52-week low.

The main drag on Nike’s performance came from falling profitability and uneven regional trends. Gross margin slipped about three percentage points to 40.6%, weighed down by higher tariffs in North America. While wholesale revenue rose 8% to $7.5 billion, especially in North America, Nike Direct sales fell 8% as digital revenue slumped 14% and sales at company-owned stores declined 3%. China remained a sore spot: revenue there fell for a sixth straight quarter, down 17% to $1.42 billion, reinforcing concerns that a full recovery in this crucial market will take longer than previously hoped.

Despite the stock’s rough week, Wall Street remains cautiously optimistic on Nike. The shares carry a “Moderate Buy” consensus, with multiple firms including Truist, Goldman Sachs, Jefferies, Guggenheim and others reiterating Buy ratings, even as some trimmed price targets following the results. Current average targets generally imply double‑digit upside from present levels, suggesting analysts see the recent pullback as a reaction to near-term margin and regional headwinds rather than a breakdown in Nike’s long‑term brand and earnings power. For investors, the key question now is whether management can stabilize margins, revive direct-to-consumer and China growth, and turn the early signs of a turnaround into a sustained recovery.