NIKE, Inc. (NYSE: NKE) just delivered the kind of quarter that usually gets rewarded: revenue and earnings came in above expectations. But the market’s reaction was blunt. Nike stock dropped sharply on Friday, closing at $58.71, down 10.54% on the day, with only a small after-hours move. [1]
So why did NKE stock fall even after an earnings beat? The short version: investors are fixated on profitability pressure (tariffs + mix shift), a still-weak Greater China business, and a near-term outlook that points to more turbulence before any clean rebound.
Below is a detailed roundup of the latest Nike stock news, management guidance, and analyst forecasts as of 20 December 2025—built for readers tracking Nike shares, the turnaround narrative, and what could move the stock next.
Nike stock price update: where NKE stands heading into the holiday week
Nike shares ended Friday at $58.71 (Dec. 19 close), with after-hours trading around $58.85. [2]
The timing matters: this move came immediately after Nike’s fiscal Q2 2026 results (quarter ended Nov. 30, 2025) and management’s outlook for the current quarter—an outlook that, frankly, did not give Wall Street the crisp “turnaround timeline” it wanted. [3]
Nike Q2 FY2026 earnings: the official headline numbers
Nike’s press release laid out a quarter that was solid on sales, softer on profit, and messy on mix:
- Revenue:$12.4B, up 1% reported (flat currency-neutral)
- Wholesale revenue:$7.5B, up 8%
- NIKE Direct revenue:$4.6B, down 8% (Digital down 14%, NIKE-owned stores down 3%)
- Gross margin:40.6%, down 300 bps
- Diluted EPS:$0.53
- Net income: about $0.8B, down 32%
- Inventories:$7.7B, down 3%
- Shareholder returns (quarter): about $598M via dividends (Nike also highlighted a long track record of dividend increases) [4]
Nike also flagged that Converse revenue fell to $300M, down 30% year over year—an additional drag that investors are treating as more than a one-quarter hiccup. [5]
If Nike beat estimates, why did NKE stock plunge?
The market’s reaction wasn’t about whether Nike can sell shoes. It was about how profitable those sales will be—and how long the company may need to run through the “cleanup + rebuild” phase.
Three pressure points dominated the post-earnings coverage and analyst commentary:
1) Tariffs are biting—hard—and they’re showing up in margin guidance
Nike reported a 300-basis-point gross margin decline to 40.6%, citing higher tariffs in North America as a primary driver. [6]
On the earnings call, CFO Matthew Friend described “new structural headwinds” including $1.5B of annualized incremental product costs from higher U.S. tariffs—roughly 320 bps of gross margin headwind in fiscal 2026 before mitigation efforts. [7]
2) China is still the biggest pressure point—and Nike says it needs a “reset”
Greater China sales fell sharply again (more on that below), and management acknowledged it will take time to fix. Reuters framed China as Nike’s biggest pressure point, noting the market accounts for roughly 15% of Nike’s annual revenue and describing continued competitive intensity from domestic brands. [8]
3) The mix shift away from high-margin direct sales is real
Nike Direct declined, while wholesale grew. That can be strategically sensible—especially if Nike is rebuilding relationships with key retailers—but it often means near-term margin compression, particularly when paired with inventory cleanup and promotional management. Nike’s prepared remarks and press release both underscore that the company is intentionally repositioning, even if the financial optics are rough in the near term. [9]
Investopedia’s summary captured the market mood: the beat happened, but the outlook and China headwinds dominated the tape, making Nike one of the biggest decliners in the S&P 500 that day. [10]
Nike’s outlook: what management guided for Q3 FY2026
Nike’s forward guidance did the most damage to sentiment—because it told investors that the transition isn’t over.
From Nike’s prepared remarks:
- Q3 revenue: expected to be down low-single-digits
- Q3 gross margin: expected to be down ~175 to 225 bps
- Nike added that excluding the tariff-related product cost impact (notably cited at 315 bps in the guidance discussion), gross margins would be positive in Q3
- SG&A dollars: expected up low-single-digits, tied to demand creation and “sport offense” investments [11]
In plain English: even as Nike invests in marketing, product, and marketplace presentation, profitability is still under pressure—and the holiday quarter (a period investors typically want to feel good about) isn’t expected to post clean growth.
Greater China: Nike’s toughest battlefield right now
The China story isn’t just “macro weakness.” It’s about competition, channel structure, and cultural relevance—and multiple reports this week emphasized all three.
Reuters highlighted that Nike has now logged a long stretch of declines in China and described a market where local competitors such as Anta and Li-Ning are intense rivals. Reuters also noted structural differences: China’s retail environment leans heavily toward monobrand stores, limiting Nike’s ability to replicate its multi-channel dominance seen in the U.S. [12]
Nike’s own prepared remarks put numbers behind the struggle:
- Greater China Q2 revenue: down 16%
- Nike Digital in China: down 36%
- Wholesale in China: down 15% [13]
Business Insider added another layer: analysts and retail watchers cited concerns that Nike may be losing cultural edge with younger Chinese consumers, while local brands connect more directly through digital ecosystems and culturally resonant campaigns. [14]
Nike’s CEO Elliott Hill said the company needs to “reset” its approach in China and emphasized adapting to a digital-first marketplace—language that signals strategic change, but also signals time and execution risk. [15]
North America: the bright spot investors don’t want to ignore
For all the pain in China and margins, Nike did deliver a cleaner story in North America—especially in wholesale.
In prepared remarks, Nike described North America as its best example of “Win Now” execution, with Q2 North America revenue up 9% and wholesale up 24% (while Nike Direct declined). [16]
Nike also described strong momentum in running, with management repeatedly positioning performance categories as the engine of the next phase of growth. [17]
This matters for Nike stock because it supports the bullish argument that the turnaround is working somewhere, and the playbook could be exported—if China and margins can stabilize.
Marketing and product innovation: Nike is spending to regain “brand heat”
Another major theme in coverage this week: Nike is clearly willing to spend to rebuild momentum—even if it delays the earnings rebound.
Ahead of the earnings report, Reuters reported that Nike’s “demand creation” (marketing) spending is expected to top $5B in 2026 (per LSEG data), up from $4.68B in fiscal 2025, and linked that investment to Nike’s push to claw back share from brands like On and Deckers’ Hoka. [18]
Nike’s earnings release also showed demand creation expense up 13% in Q2, tied to higher brand and sports marketing expense. [19]
Management also pointed to product and partnership initiatives—such as the NikeSKIMS rollout and a renewed emphasis on sport-focused innovation—while framing fiscal 2026 as a year of rebuilding the portfolio and marketplace quality. [20]
The catch: investors typically want to see marketing spend paired with accelerating growth, not just “strategic intent.” That’s why the market reaction leaned negative even with an earnings beat.
Analyst forecasts and price targets for Nike stock: what Wall Street is modeling now
Analyst reaction since the earnings release has been mixed, but it clusters around a consistent narrative:
- Near-term caution (China + margins + tariff costs)
- Medium-term optimism (brand power + North America momentum + product refresh)
Consensus view: still “Moderate Buy,” but targets are moving
MarketBeat lists Nike with a “Moderate Buy” consensus and an average price target around $78.14 (with a wide range). [21]
StockAnalysis similarly shows a consensus “Buy” with an average target around $78.65 (low end around the low $60s; high end in the low $100s). [22]
Using the latest close ($58.71), a ~$78 target implies roughly 33% upside, but that upside is essentially a bet that Nike executes through 2026 without the margin and China issues getting worse. [23]
Notable target changes and commentary cited in today’s coverage
Investing.com summarized several recent adjustments, including:
- Bank of America price target cut to $73 (maintaining a buy stance, but citing China challenges)
- Stifel target cut to $65
- BTIG reiterating Buy with a $100 target [24]
Barron’s coverage also highlighted the “buy the dip” camp (including a Jefferies Buy stance with a higher target) versus firms turning more cautious as China weakness persists. [25]
The practical takeaway for NKE investors: Wall Street hasn’t abandoned Nike, but analysts are increasingly demanding evidence that margins can recover while Nike rebuilds brand heat and fixes China.
Key catalysts for NKE stock in 2026
Nike’s next major swing factor is simply whether management can show the “middle innings” are producing measurable outcomes. Based on Nike’s guidance and current coverage, these are the catalysts most likely to move the stock next:
- Tariff mitigation progress
Nike has framed tariff costs as a major structural headwind and said it is taking actions to reduce the net impact—but investors will want proof in gross margin trends. [26] - China strategy reset—especially digital
With Nike Digital down sharply in Greater China, improvement in brand traction and digital performance could materially change the tone around the turnaround. [27] - Wholesale strength vs. direct profitability
Nike’s wholesale rebound (especially in North America) is currently a bright spot—but the long-term bull case still depends on a healthy premium direct business. [28] - Marketing-to-sales conversion
Nike is spending more on demand creation. Investors will look for evidence that the spend is translating into stronger full-price sell-through and better product momentum. [29] - Next earnings date: mid-March 2026 (expected)
Third-quarter earnings are broadly expected around mid-March 2026, based on earnings calendars (note: dates can change if the company updates its schedule). [30]
Bottom line: Nike stock is in “prove it” mode
Nike’s Q2 FY2026 earnings showed a company that can still generate sales growth and wholesale momentum—but also a company wrestling with tariff-driven cost inflation, a challenged China business, and a margin profile under pressure at the exact moment it’s trying to spend its way back to cultural leadership.
For Nike stock bulls, the argument is that the brand is too powerful, North America is stabilizing, product innovation is returning, and a better margin trajectory can emerge once the cleanup phase ends.
References
1. stockanalysis.com, 2. stockanalysis.com, 3. investors.nike.com, 4. investors.nike.com, 5. investors.nike.com, 6. investors.nike.com, 7. s1.q4cdn.com, 8. www.reuters.com, 9. investors.nike.com, 10. www.investopedia.com, 11. s1.q4cdn.com, 12. www.reuters.com, 13. s1.q4cdn.com, 14. www.businessinsider.com, 15. www.businessinsider.com, 16. s1.q4cdn.com, 17. s1.q4cdn.com, 18. www.reuters.com, 19. investors.nike.com, 20. s1.q4cdn.com, 21. www.marketbeat.com, 22. stockanalysis.com, 23. www.marketbeat.com, 24. www.investing.com, 25. www.barrons.com, 26. s1.q4cdn.com, 27. s1.q4cdn.com, 28. s1.q4cdn.com, 29. www.reuters.com, 30. www.investing.com
