NKE Q2 Earnings Preview: Can Nike maintain the recovery momentum?

Sneaker giant NIKE, Inc. (NYSE: NKE) entered the fiscal year facing heightened competition and shifting consumer preferences. Its upcoming second-quarter results are expected to reflect these evolving industry dynamics and the company’s push to reignite growth through product innovation and operational resets. Management is also working to offset the dual pressures of inflation-driven consumer caution and higher tariffs on imported goods.

Estimates

Nike’s second-quarter report is slated for release on Thursday, December 18, at 4:15 pm ET. It is estimated that Q2 earnings declined sharply to $0.38 per share from $0.78 per share in the year-ago quarter. Market watchers are looking for total revenues of $12.21 billion for the November quarter, compared to $12.35 billion reported in Q2 2025. In the past two years, the company’s quarterly earnings have regularly beaten estimates.

Nike shares have been volatile this year, characterized by sustained weakness and only short-lived rebounds. Although NKE has sustained some of its mid-year gains, the stock is down 9% since the beginning of 2025. The recent improvement in investor sentiment reflects confidence in management’s efforts to streamline operations. From an investment perspective, the price drop presents an opportunity to buy this blue-chip stock, which also pays a modest dividend.

Mixed Outcome

Signalling a potential rebound after a challenging year, Nike reported an increase in revenue for the first quarter of fiscal 2026, with sales rising to $11.72 billion from $11.59 billion in Q1 2025. The top line beat estimates, continuing the recent trend. Net income declined to $727 million or $0.49 per share in the August quarter from $1.05 billion or $0.70 per share a year earlier, but exceeded expectations.

“We are working to find the right assortment and marketing mix to consistently bring consumers back to our digital ecosystem. For our company, our size, with 3 brands that serve consumers in nearly 190 countries, not all sports, channels, or countries will recover on the same timelines. I spent a lot of time reflecting on the last several months. What keeps me grounded is every time I return from a major sporting event, meeting with athletes, or being in the marketplace. I’m even more convinced that the Win Now actions are absolutely the right focus for our teams,” Nike’s CEO Elliott Hill said in the Q1 FY26 earnings call.

Back on Track?

Nike’s Win Now turnaround plan, formulated by Elliott after taking the helm in late 2024, focuses on returning to the company’s roots: serving athletes, reviving wholesale partnerships, and innovating its portfolio. Now, product development and marketing are centered around performance and sport rather than lifestyle alone. After drifting away from wholesale partnerships and leaning heavily on a DTC-focused sales model, the company is once again re-engaging with its partners. At the same time, Nike products are receiving a fresh wave of innovation, the absence of which had drawn criticism previously.

On Friday, Nike shares opened at $68.17 and traded lower mostly during the session. The average stock price for the past 12 months is $69.02. NKE has lost around 12% since last year.