Nike earnings beat forecasts; CEO Elliott Hill eyes World Cup test

Nike earnings beat expectations

When Elliott Hill returned from retirement to steer the icon, the goal was a radical “sport offense” aimed at mending strained retailer ties and reviving athlete loyalty. The latest quarter delivered ↑ $10.97B in revenue and ↑ 20¢ earnings per share, eclipsing the consensus of $10.86B and 13¢ respectively. A near‑billion‑dollar tariff refund boosted gross margin by 8.9%, though analysts stripped that windfall from their models.

Hill inherited a company sliding 5% YoY in revenue and a 62% plunge in EPS since its May 2024 peak. Since his first earnings release in November 2024, EPS has fallen ↓ 56% to $1.51, while operating income is half of its former level. The turnaround hinges on restoring shelf presence after predecessor John Donahoe’s direct‑to‑consumer push alienated partners like Dick’s Sporting Goods.

On the offensive

Hill’s playbook shifts design from generic demographics to athlete‑centric innovation, a stance he outlined at UC Berkeley’s Haas School in May 2026. He told the Financial Times that the restructuring is “taking longer than anticipated,” but added, “Job’s not done until the job’s done.”

“We’re leveraging every stadium, every broadcast, every fan moment to prove that Nike’s sport‑led DNA still leads the market,” Hill said during the earnings call.

North American revenue growth has risen 15 percentage points from its nadir, signaling early traction.

Nike’s World Cup moment

The upcoming FIFA tournament is Hill’s global litmus test. Nike supplies kits to 12 national squads and rolls out Mercurial boots, Tiempo cleats, and Aero FIT jerseys, positioning soccer as the next frontier of the sport offense. Rival Adidas, an official FIFA partner, will counter with Lionel Messi‑centric ads, while Nike banks on Cristiano Ronaldo, Kylian Mbappé, and LeBron James, plus pop culture icons like Kim Kardashian and K‑pop star Lisa in the “Rip the Script” campaign that has already amassed 78 million views versus Adidas’ 7.8 million.

Morningstar senior analyst David Swartz told Bloomberg that the World Cup spend aims to create “something worth talking about, worth clipping, worth wearing.” He noted that while the U.S. market shows promise, Nike’s China segment continues to shrink, slipping from $7 billion to $6 billion and projected to hit $5.5 billion by August, a concern amplified by inventory gluts and waning full‑price sales.

The lingering effects of the pandemic on consumer spending still echo, pressuring Nike to balance discounting with margin recovery.