Nike navigates multi-year turnaround with mixed Q2 results

Nike, Inc. announced financial results for its second fiscal quarter ended November 30, 2025, revealing a complex landscape of modest top-line growth and significant bottom-line pressure as the company navigates a multi-year turnaround.

Total revenues reached 12.4 billion dollars, representing a 1 percent increase on a reported basis but remaining flat on a currency-neutral basis.

Nike's Greater China woes deepen

The company’s "Greater China playbook" is also facing intense scrutiny. Once the primary engine of global growth, the region has transformed into Nike’s most persistent pressure point. The company reported a 17 percent revenue decline in Greater China, the sixth consecutive quarterly drop—highlighting a structural disconnect with local consumers that is proving difficult to bridge.

The downturn was particularly severe in the performance category, where footwear sales plummeted 20 percent. This slump underscores a widening gap in a market that now accounts for approximately 15 percent of Nike’s total revenue. During Thursday’s post-earnings call, CEO Elliott Hill was candid about the situation, admitting, "It’s clear we need to reset our approach to the China marketplace."

While Hill’s broader "Win Now" strategy focuses on refreshing product pipelines and cutting legacy lifestyle lines, the anticipated "slow and steady" progress in China has yet to materialize, leaving investors increasingly impatient. Nike’s stock fell 10 percent following the earnings release, extending a year-to-date decline of 13 percent.

Nike's direct segment and profit witness sharp declines

The quarter was further characterized by a distinct shift in channel performance; while wholesale revenues surged 8 percent to 7.5 billion dollars driven largely by North American expansion, the Nike Direct segment fell 8 percent to 4.6 billion dollars. This decline was underscored by a 14 percent drop in digital sales, highlighting the ongoing challenges in the company’s e-commerce and owned-store ecosystems.

Profitability metrics faced notable headwinds during the period. Gross margin contracted by 300 basis points to 40.6 percent, a decline the company attributed primarily to higher tariffs in the North American market. Consequently, net income plummeted 32 percent to 0.8 billion dollars, resulting in diluted earnings per share of 53 cents.

Executive leadership framed the results as part of a necessary, deliberate transition. President and CEO Elliott Hill described the company as being in the "middle innings" of a comeback, emphasizing a "Win Now" strategy focused on realigning teams and strengthening wholesale partner relationships.

CFO Matthew Friend echoed this sentiment, noting that while the company is managing headwinds from a dynamic operating environment and business repositioning, the portfolio remains resilient.

Despite the earnings contraction, Nike distributed 598 million dollars in dividends, a 7 percent increase over the previous year - marking 24 consecutive years of dividend growth.