NKE

Nike's Q3 FY2026 results reveal a company in the midst of deliberate, multi-quarter restructuring that is beginning to show tangible progress in core areas but remains pressured overall. Revenue was flat reported and down 3% currency-neutral, with EPS of $0.35 versus consensus of $0.4365, marking a clear miss. The headline numbers mask a more nuanced picture: management intentionally removed roughly five percentage points of revenue by liquidating unhealthy inventory from classic footwear franchises, a strategic choice that CEO Elliott Hill frames as necessary medicine for long-term health. The real story lies in the divergence across the portfolio. North America is emerging as the turnaround's flagship, with wholesale growing 11%, Running up over 20%, and management noting the first positive growth across all channels in two years (in February). This validates the "sport offense" strategy and integrated marketplace rebalancing that Hill has prioritized. Conversely, EMEA deteriorated sharply, with revenue down 7% and NIKE Direct down 13%, complicated by elevated promotionalism, traffic disruption from Middle East tensions, and Sportswear weakness. Greater China declined 10% but showed sequential improvement in sell-through and margin expansion, suggesting the worst may be pricing in. Gross margin contracted 130 basis points to 40.2%, with 300 basis points attributable to North America tariffs, a headwind management expects to persist through Q2 FY2027 before inflecting. The company also took a $230 million