Nike stock is falling today. What the footwear brand said that has investors worried about the rest of 2026

Nike is attempting to turn things around, but it could be a long road to success.

The athletic company closed out March with the release of its latest earnings. The fiscal 2026 third-quarter report brought mixed progress, leading to a more than 10% drop in shares of Nike Inc (NYSE: NKE) after hours on Tuesday and into premarket on Wednesday.

Nike stock was already down more than 16% year to date, compared to a more modest decline of 4.8% for the broader S&P 500 index.

The earnings report comes a year and a half into CEO Elliott Hill’s tenure and less than three months after Nike announced it would lay off 775 workers across its U.S. distribution centers. 

Let’s start with the report’s good news. 

Nike beat Wall Street’s expectations for total revenue and earnings per share, according to consensus estimates cited by CNBC. The company reported $11.28 billion in revenue, compared to the predicted $11.24 billion. It also reached earnings per share of 35 cents, up from the expected 28 cents.

Quarterly revenue was flat year-over-year (YOY), though revenue for fiscal 2026’s three quarters rose 1% YOY.

“We could experience unplanned volatility”

Nike’s revenue for North America—its most prominent market—is good and bad. In one respect, it increased 3% YOY to $5.03 billion, led by a 6% uptick for footwear. Yet it fell just short of Wall Street’s predicted $5.04 billion.

Meanwhile, Nike’s net income fell 35% YOY, from $794 million to $520 million. 

But, the most startling part of Nike’s third-quarter results came during the company’s earnings call. Nike’s CFO and EVP, Matt Friend, shared that the company expects quarter-four revenue to drop between 2% and 4%. 

Friend attributed the decline to a predicted 20% drop in revenue for China with “modest growth” for North America. 

The company’s gross margin also decreased—something it blames mostly on higher tariffs in North America. However, Friend shared that Nike expects higher tariffs to stop having such an impact on gross margin after the fiscal 2027’s first quarter—if nothing significant changes.

“We also recognize that the environment around us has become increasingly dynamic, and we could experience unplanned volatility due to the disruption in the Middle East, rising oil prices, and other factors that could impact input costs or consumer behavior,” Friend added. “These assumptions reflect the macro environment as it stands today.”

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