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Ahead of its latest earnings Nike is racing to reverse a two-thirds collapse in its market value over the last four-and-a-bit years.
CEO Elliot Hill is pivoting from a struggling direct-to-consumer model back to the brand’s performance roots to outrun mounting tariff pressures and cooling demand in China.
The company is scheduled to release its third-quarter numbers after the market close on 31 March.
How has the company been performing?
Expectations for the period, covering the three months to 28 February, dipped after the company guided for a low single-digit fall in revenues and a 1.75% to 2.25% drop in gross margins, following disappointing second-quarter earnings on 19 December 2025.
Nike reported a 30% fall in earnings per share to $0.53, reflecting tariffs, sales weakness in China and costly promotions to reduce excess stock.
The earnings report sent the shares down by 10% to their lowest level in seven months, which means they have dropped by more than 60% from the late 2021 peak.
The turnaround under Hill, a veteran of the company who came out of retirement in 2024 to drive a recovery, is predicated on steering Nike away from an overreliance on lifestyle categories and back towards performance categories like running, basketball, and football.
Hill is reversing a previous tilt towards a DTC (direct-to-consumer) model by re-engaging with wholesalers to regain lost share to competitors like On and Hoka.
Nike is also shifting away from Chinese manufacturing to increase supply chain diversification and reduce tariffs. China remains a key market for Nike as it tries to reconnect the brand to everyday sports participation rather than fashion. The company has struggled thanks to domestic competition in China and damage to the brand caused by the company expressing concern about forced labour in the Xinjiang region, something which prompted a consumer boycott.
What are consensus expectations?
Consensus forecasts imply close to a 10% fall in revenues to around $11.3 billion, with earnings per share coming in at $0.32. This reflects margin pressure and higher operating costs.
Analysts have meaningfully lowered their estimates and priced in tariff costs, margin compression and further weakness in the direct-to-consumer sales channel.
The shares are down by around 10% over the last three months compared with a small gain in the S&P 500 index. Hill warned investors achieving a return to fortunes for Nike would be a marathon not a sprint and this has proven to be the case thus far.
Tom Sieber: Content Editor
Tom Sieber is AJ Bell's Content Editor. He was previously the Editor of Shares Magazine. He has been with the business since 2012.
Tom is a regular contributor to the AJ Bell Money & Markets...
