The numbers looked fine on paper. Earnings of 35 cents a share beat the 28-cent forecast. Revenue of $11.28 billion edged past the $11.24 billion estimate.

None of it mattered.

What Spooked Investors

Nike said it expects a 2% to 4% revenue decline in the current quarter. Analysts had been expecting a nearly 2% increase. That's a big swing in the wrong direction for a company that's been promising a comeback for over a year.

The worst of it is coming from China. CFO Matt Friend said Nike is bracing for a 20% sales drop there this quarter.

Sales in Greater China were already sliding - down 7% to $1.62 billion over the past three months - though even that still came in above what analysts had penciled in.

For the rest of 2026, Friend said the whole company will keep losing ground, at a low single-digit rate. North America will grow. Everything else will drag it down.

The Turnaround That Keeps Getting Longer

Elliott Hill came out of retirement about 18 months ago to fix Nike. He's made progress - wholesale revenue grew 5%, and North America posted a 3% gain last quarter.

Net income came in at $520 million - a 35% plunge compared to the same period last year. Tariff costs in the U.S. squeezed margins, pushing gross profit down to 40.2%.

Sales through Nike's own website and stores fell 4%, landing at $4.5 billion.

During an all-hands meeting on Tuesday, Hill told staff he was worn out from constantly talking about repairs. He wants the company to start growing and "having fun" again, according to Bloomberg.

His CFO was more blunt. Friend told employees the business "is not moving in the right direction" and asked teams to cut back on costs wherever possible.

What to Watch

Nike now has two problems stacking on top of each other. The turnaround is taking longer than investors hoped, and the world around the company is getting harder to predict.

Friend pointed to the conflict with Iran, climbing energy costs, and unpredictable consumer spending as wildcards that could make things worse.

Nike shares have lost roughly two-thirds of their value since 2021. Investors have been patient. That patience ran out on Wednesday.