Nike Q4 Revenue Beats Estimates, but Tariff Refund Masks Underlying Pressure

Nike reported fiscal fourth-quarter revenue of $10.97 billion, down 1% year over year on a reported basis but ahead of Wall Street's $10.86 billion estimate . Diluted earnings per share came in at $0.72, sharply higher than $0.14 a year earlier, though the headline figure was inflated by a one-time $0.52-per-share benefit tied to the recovery of IEEPA tariffs the company had previously paid . Stripping out that tariff windfall, underlying diluted EPS was approximately $0.20, which still topped analyst expectations but paints a more modest picture of the quarter's operating performance .

The tariff benefit, worth roughly $986 million, stemmed from a Supreme Court ruling that invalidated certain tariffs imposed during the Trump administration, and it lifted gross margin by about 900 basis points to 49.2% . Because the refund is a non-recurring item tied to litigation rather than to the underlying business, it will not repeat in future quarters, meaning the durable earnings power of the business is closer to the $0.20 figure than the $0.72 headline number.

Greater China remained the company's most persistent trouble spot, with revenue there falling 12% year over year to roughly $1.30 billion amid intensifying local competition and shifting consumer preferences . Performance elsewhere in the portfolio was mixed rather than uniformly strong: North America revenue grew 3% to about $4.83 billion, APLA (Asia Pacific and Latin America) edged up 1% to roughly $1.60 billion, while EMEA revenue slipped 1% to about $2.98 billion . Nike Direct, the company's owned retail and digital channel, fell 9% on a currency-neutral basis, with digital sales down 12%, reflecting continued softness in direct-to-consumer demand even as wholesale partners showed relative resilience .

Management did not issue formal forward guidance on the earnings call, instead pointing to progress in performance product lines and a continued focus on execution and profitability improvement . Nike's turnaround, launched under CEO Elliott Hill, remains a multi-quarter process, and this print illustrates why: a genuine beat on revenue and adjusted profitability was accompanied by an accounting tailwind that will not recur, while the company's largest historical growth market continues to contract. Investors weighing the stock should separate the one-time tariff recovery from the underlying trend, which shows gradual stabilization in North America offset by an unresolved China problem.