Nike Stock (NKE) Slides After Fiscal Q2 2026 Earnings: Tariffs, China Weakness, Analyst Price Targets and the 2026 Outlook

Nike, Inc. (NYSE: NKE) is ending the week under intense investor scrutiny after a sharp post-earnings selloff reset expectations for the company’s turnaround. As of Dec. 20, 2025 (with U.S. markets closed for the weekend), Nike shares last closed at $58.71, down $6.92 (−10.54%) on unusually heavy volume, reflecting a market that’s increasingly focused on near-term margin pressure and China execution rather than a modest revenue beat.

The move came after Nike reported fiscal second-quarter 2026 results (quarter ended Nov. 30, 2025) that topped profit expectations but highlighted three issues that continue to dominate the Nike stock narrative: tariff-driven cost inflation, persistent weakness in Greater China, and a channel mix shift that supports market share and inventory cleanup in the short run—but can compress margins and complicate the path back to premium, full-price selling. ^[1]

Below is a comprehensive roundup of the latest news, forecasts, and analyst takes circulating as of 20.12.2025, plus what to watch next if you follow Nike stock.

What’s driving Nike stock right now

1) A big one-day drop after a “beat” is a message about confidence—not math

Nike reported revenue of $12.427 billion for the quarter, up about 1% year over year. ^[2]
But net income fell to $792 million (down 32%) and gross margin declined to 40.6% (down 300 basis points), underscoring that Nike’s current recovery playbook is still putting pressure on profitability. ^[3]

That’s the core of why Nike stock sold off: investors didn’t punish the top line—they repriced the timeline and cost of the turnaround.

2) China remains the central overhang

Multiple reports point to China sales falling 17%—the sixth straight quarterly decline—raising questions about how quickly Nike can rebuild momentum against local and global rivals. ^[4]
Business Insider framed the issue more bluntly: Nike may be losing cultural relevance with younger Chinese consumers as domestic brands connect more effectively with local tastes and digital ecosystems. ^[5]

Nike’s CEO acknowledged the need to “reset” the approach in China, but investors have been looking for clearer milestones—and this quarter didn’t provide a clean inflection point. ^[6]

3) Tariffs are showing up as a direct margin problem

Nike’s CFO detailed how tariffs are flowing through the income statement in a way that’s hard to offset quickly:

Nike expects $1.5 billion of annualized incremental product costs tied to higher U.S. tariffs. ^[7]
The company described this as a ~320 basis-point gross headwind to gross margin in fiscal 2026, though it has started actions to reduce the net impact to about ~120 basis points. ^[8]
For fiscal Q3 (the holiday quarter), Nike expects gross margin to be down ~175 to 225 basis points—and notably said that excluding a 315 basis-point impact from higher costs related to new tariffs, gross margin expansion would be positive. ^[9]

That “excluding tariffs” detail is important for Nike stock bulls: it implies underlying improvement may be developing—but tariffs are currently overwhelming it in reported results.

The key numbers investors are debating after Nike’s Q2 report

Here are the figures and operational signals most frequently cited in the post-earnings coverage and analyst notes:

Revenue: $12.427B (up ~1% YoY). ^[10]
Net income: $792M (down ~32% YoY). ^[11]
Gross margin: 40.6% (down 300 bps). ^[12]
NIKE Direct: down 9% (NIKE Digital down 14%; NIKE stores down 3%). ^[13]
Wholesale: grew 8%. ^[14]
“Classics” pullback: Nike cited an estimated $550M headwind tied to reducing classic franchises, down over 20% versus the prior year. ^[15]
Inventory: described as down 3% year over year (with units down high single digits). ^[16]
Greater China: sales down 17%, continuing a multi-quarter slide. ^[17]

The tension for Nike stock is that several “turnaround” moves (clearing older product, pulling back classics, rebuilding wholesale partnerships) can help brand health—but often hurt margins and make growth look uneven.

Why “middle innings” didn’t reassure the market this time

Nike CEO Elliott Hill used the phrase that the company remains in the “middle innings” of its comeback, but investors appeared to want a sharper timetable—especially for China and margins. Reuters noted that analysts on the call pressed for more specifics on what “middle innings” means and when growth normalizes. ^[18]

Investopedia captured the broader market interpretation: investors may accept that a turnaround takes time, but the stock reaction suggests they’re not willing to price in a smooth recovery without clearer proof, particularly in China. ^[19]

China: the “cultural edge” debate is back—and it matters for Nike stock

One reason China has become such a sensitive point for Nike shares is that it’s not only a macro story (consumer demand, pricing pressure, competition)—it’s also a brand relevance story.

Business Insider highlighted expert concerns that Nike’s cultural resonance in China is weakening as domestic competitors build “Guochao” momentum and win Gen Z attention through local digital platforms and community-driven marketing. ^[20]
Retail Dive reported commentary that Nike did not invest adequately in its China store footprint, contributing to a cycle of soft demand and heavier promotions, and reiterated that Nike expects different parts of the business to recover at different speeds. ^[21]
Reuters similarly framed China as the slowest-moving piece of the recovery, with observers growing impatient as the declines extend. ^[22]

For Nike stock, this matters because China is typically one of the markets where premium positioning can generate stronger pricing power. If the brand needs more discounting to move product, the margin problem deepens.

The channel shift: wholesale is back, but DTC is the debate

Nike’s renewed emphasis on wholesale partnerships is a central theme of Hill’s strategy—and investors are split on what it means:

On one hand, wholesale gains can improve distribution, visibility, and sell-through, especially if Nike rebuilds relationships with major retail partners. ^[23]
On the other hand, a bigger wholesale mix can pressure margin versus direct-to-consumer, and it can increase inventory risk if demand forecasts are wrong.

Retail Dive pointed to a striking divergence in North America: wholesale growth was strong while DTC declined, and some analysts worry Nike could become too reliant on wholesale “sell-in” (shipments to partners) rather than consumer pull. ^[24]
Investopedia also noted that some observers interpret weaker Nike.com/store trends as partly intentional—reflecting reduced promotions and a push back toward full-price selling. ^[25]

This is the key question for Nike stock going into 2026: can Nike grow again without leaning on heavy promotions, while also keeping wholesale healthy?

Analyst forecasts and Nike stock price targets as of 20.12.2025

The big picture: consensus targets still imply upside—but the ranges are wide

Across major tracking services, Nike’s consensus price targets still sit well above the current share price, though each platform uses different analyst sets and update timing:

StockAnalysis: average target $77.61 (high $120, low $38), based on 32 analysts. ^[26]
TipRanks: average target $82.04 (high $120, low $38), based on 30 analysts. ^[27]
MarketBeat: consensus target $78.14 (high $115, low $62). ^[28]
Nasdaq (Fintel-based summary): average one-year target $85.01 (range $38.38 to $126.00) as of early December. ^[29]

What these numbers suggest: even after a bruising 2025, many analysts still see Nike stock as a longer-term turnaround story—but there is meaningful disagreement about how long it will take and how much margin power Nike can reclaim.

Post-earnings target cuts: more caution, not a wholesale abandonment

Several firms trimmed targets after the Q2 report while keeping ratings that imply the turnaround can work:

Bank of America: maintained a Buy rating but cut the price target to $73 from $84. ^[30]
Piper Sandler: lowered the price target to $75 from $84, kept Overweight. ^[31]
Wells Fargo: lowered the price target to $65 from $75, kept Overweight. ^[32]
Needham: lowered the price target to $68 from $78, kept Buy, while warning the turnaround may be deeper and slower—especially in China. ^[33]

The common thread in the cuts is not “Nike can’t recover,” but rather “the recovery is likely to be longer and messier,” particularly with tariffs amplifying cost pressures.

The 2026 outlook: what bulls vs. bears are watching

The bull case for Nike stock

Nike stock optimists generally point to several potential catalysts:

Underlying margin improvement masked by tariffs
Nike’s commentary that margins would expand in Q3 excluding tariff impacts implies internal cleanup and mix work could be moving in the right direction. ^[34]
Marketing investment and product innovation
Reuters reported Nike is ramping marketing efforts, with spending expected to exceed $5 billion in 2026, while pushing new running product updates like Pegasus Premium and Vomero 18 to reclaim share from “nimbler” rivals. ^[35]
NikeSKIMS and women’s growth opportunities
Nike has positioned NikeSKIMS as a meaningful women’s platform, with Nike previously announcing global expansion into 2026. ^[36]
Retail Dive also reported management sees strong performance in North America and intends to expand NikeSkims to other geographies. ^[37]
North America as a “blueprint”
North America’s strength is frequently cited by management and analysts as evidence the strategy can work in at least one major region—even if China takes longer. ^[38]

The bear case for Nike stock

Nike stock skeptics, meanwhile, are focused on risks that could keep shares volatile:

Tariffs could remain a multi-quarter earnings headwind
Nike’s own disclosures frame tariff costs as structural enough to influence fiscal 2026 margins meaningfully, even after mitigation efforts. ^[39]
China may require a deeper repositioning than investors want to underwrite
The “cultural lag” framing suggests the fix isn’t just distribution or pricing—it may require a sustained shift in localized marketing, digital engagement, and product storytelling. ^[40]
Wholesale-driven growth can create future inventory problems
Some analysts worry Nike could lean too heavily on wholesale sell-in while DTC remains soft, potentially recreating inventory and promotion cycles. ^[41]
Credit-market caution is already visible
Earlier in 2025, Moody’s downgraded certain Nike debt ratings citing tariff-driven cost pressure and other factors, while shifting the outlook to stable—an important reminder that these pressures are being tracked beyond equity markets. ^[42]

What to watch next for Nike (NKE) stock

With Nike’s fiscal Q3 including the holiday shopping season, the next few months are likely to be about execution and evidence more than storytelling. The most important watch items for Nike stock holders heading into 2026 include:

Holiday-quarter demand and promotion levels: Nike is trying to move toward fewer promotions and higher full-price realization, which can be volatile quarter-to-quarter. ^[43]
China “reset” details: investors will likely look for concrete progress markers—store strategy, digital engagement, assortments, and competitive positioning. ^[44]
Tariff mitigation progress: Nike has outlined efforts to reduce the net impact, but the market will want to see that flow through margins. ^[45]
Channel balance: how well wholesale growth holds up without harming inventory health—and whether DTC trends stabilize as Nike cleans up classic franchises. ^[46]