Nike Surpasses Revenue Forecasts as CEO Elliott Hill Drives Strategic Pivot

Nike reported fiscal third-quarter revenue of $11.28 billion for the period ended February 28, 2026, flat compared to the prior year but ahead of analyst estimates of $11.23 to $11.24 billion, according to data compiled by LSEG and FactSet. Net profit fell 35% to $520 million, or 35 cents per share, down from $794 million, or 54 cents per share, a year earlier, according to the Wall Street Journal and Zeit Online. Despite the profit decline, the result beat the analyst forecast of 29 cents per share. Bloomberg reported that sales showed signs of recovery faster than expected from a prolonged slump, with the quarterly figures covering much of the key holiday shopping period. Nike shares have declined 17% so far in 2026, according to Bloomberg, and slipped an additional 1.7% in extended New York trading following the earnings release.

Wholesale rebound offsets direct sales slide The clearest sign of Nike's strategic shift came in its channel breakdown, with wholesale revenue rising 5% to $6.5 billion while direct-to-consumer revenue fell 4% to $4.5 billion. The divergence reflects a deliberate reversal of a years-long strategy under which Nike had prioritized selling directly to consumers at the expense of retail partners, according to Zeit Online. That earlier approach allowed competing brands to claim shelf space in stores, particularly in the United States, and contributed to sales losses. In North America, revenue increased 3% to just over $5 billion, while sales also ticked up in the Europe, Middle East and Africa region and in the Asia Pacific and Latin America market, according to the Wall Street Journal. The company said its turnaround efforts will continue to affect results throughout this calendar year.

Nike channel revenue shift: Wholesale revenue (before: lower base (prior year), after: $6.5 billion, +5%); Direct-to-consumer revenue (before: higher base (prior year), after: $4.5 billion, -4%)

China sales slide 7% as local rivals gain ground China remained Nike's most significant trouble spot, with sales declining 7% in the quarter, according to the Wall Street Journal and confirmed by Bloomberg. The drop reflects weaker product assortments, slower innovation, and mounting pressure from fast-rising local competitors including Anta and Li Ning, according to Reuters. Bloomberg noted that performance in China showed some signs of improvement, though the market remains a drag on overall results. Nike has identified China as its second-largest market outside North America, making the sustained decline a strategic priority. The company faces a broader consumer spending backdrop marked by a stagnant labor market and mounting credit card debt, according to Reuters, adding pressure to its recovery timeline.

7 (%) — China sales decline in fiscal Q3 2026

Nike built its China business over decades as the country's middle class expanded and demand for Western sportswear brands surged. The rise of domestic competitors such as Anta and Li Ning accelerated following a wave of nationalist consumer sentiment in China in recent years. Nike's strategy of reducing wholesale partnerships in favor of direct-to-consumer sales, pursued in the years before Elliott Hill's appointment, left it with thinner retail presence in key markets at a time when local rivals were expanding aggressively.

Hill's sports-first strategy begins showing early results Elliott Hill, a longtime Nike executive who was appointed chief executive in October 2024, has centered his turnaround strategy on returning the company to its performance sports roots in categories such as running and basketball, according to Reuters and Bloomberg. Zeit Online reported that Hill ordered the company to refocus more strongly on athletes after the product range had drifted increasingly into the lifestyle sector in prior years. Bloomberg noted that Hill is also working to reverse declines in the Converse brand, while having recently replaced the head of that unit. Nike has yet to issue longer-term guidance since Hill assumed the chief executive role, but executives were expected to provide an outlook for the current quarter during the company's call with analysts, according to Bloomberg. Hill addressed the state of the turnaround directly in the company's earnings release.

„The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of Nike” — Elliott Hill via The Wall Street Journal

Direct-to-consumer revenue declines and the wholesale rebound together signal that the channel rebalancing Hill initiated is beginning to take hold, though the company acknowledged the process will weigh on results for the remainder of the calendar year.