Nike, Inc. released its financial results for the second fiscal quarter ended November 30, 2025 on Thursday evening. They paint a complex picture of moderate sales growth and considerable pressure on operating results. The company is in the midst of a multi-year turnaround.
Total sales amounted to 12.4 billion US dollars (10.59 billion euros). This corresponds to an increase of one percent on a reported basis. However, adjusted for currency effects, sales remained unchanged.
Nike’s problems in Greater China are deepening
The company’s operational playbook for Greater China is under intense scrutiny. The region was once the key driver of global growth, but is now Nike’s most persistent problem area. The company reported a 17 percent decline in sales in Greater China – its sixth consecutive quarterly decline. This highlights a structural discrepancy between Nike and local consumers that is proving difficult to bridge.
The decline was particularly pronounced in the performance category. Shoe sales there fell by 20 percent. The slump highlights the growing divide in a market that accounts for about 15 percent of Nike’s total sales. During Thursday’s quarterly earnings conference call, Chief Executive Officer (CEO) Elliott Hill was candid about the situation. He admitted: “It is clear that we need to recalibrate our approach to the Chinese market.”
Hill’s overarching “Win Now” strategy focuses on renewing product pipelines and eliminating outdated lifestyle lines. However, the expected “slow and steady” progress in China has not yet materialized, which is increasingly straining investors’ patience. Nike shares fell ten percent after the results were published. This means that the price decline since the beginning of the year has increased to 13 percent.
Nike’s direct business and profits under severe pressure
The quarter was also marked by a significant shift in channel performance. Wholesale sales rose eight percent to $7.5 billion, driven primarily by expansion in North America. The Nike Direct segment, on the other hand, recorded a decline of eight percent to $4.6 billion. This decline was further exacerbated by a 14 percent drop in digital sales, highlighting the ongoing challenges in e-commerce and the company’s own stores.
Profitability metrics were also under significant pressure during the reporting period. The gross margin fell by 300 basis points to 40.6 percent. The company attributed this decline primarily to higher tariffs in the North American market. As a result, net profit fell by 32 percent to $0.8 billion. Diluted earnings per share amounted to 53 cents.
Company management viewed the results as part of a necessary and consciously managed transition. Hill described Nike as being in the “middle innings” of a comeback. He emphasized the “Win Now” strategy, which aims to realign teams and strengthen relationships with wholesale partners.
Chief Financial Officer (CFO) Matthew Friend echoed this sentiment. He explained that while the company faces headwinds from a dynamic operating environment and ongoing business repositioning, the overall portfolio remains resilient.
Despite the significant decline in profits, Nike paid out dividends of $598 million. This represents a seven percent increase over the previous year and marks the 24th consecutive year of dividend growth.
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