When Nike He brought Elliott Hill out of retirement almost two years ago and took over the management of the sports group. He intended to turn the brand’s strained relationships with athletes and retailers into what Hill would later call “sports malfeasance.”
This aggressive strategy appeared to be paying off – at least in North America – as Nike’s quarterly earnings beat Wall Street’s expectations. The company reported adjusted earnings per share of 20 cents, compared with expectations of 13 cents. The company also reported revenue of $10.97 billion, up $130 million from the expected $10.86 billion. And thanks to a nearly $US1 billion ($986 million) tariff refund, the company’s gross margin rose 8.9% during the quarter – even as analysts excluded the increase in their earnings expectations.
But Hill, the Nike CEO, faces two testimonials. The picture after today’s bell shows the real progress Hill has made in stemming Nike’s losses (for the past two years, Nike’s sales have fallen every single quarter, while profit margins have shrunk and earned earnings per share have fallen by nearly two-thirds). But he also faces the World Cup, which will be played in stadiums in the United States, Mexico and Canada. The World Cup could show whether his efforts to rejuvenate Nike’s sports culture into something consumers really want have really paid off.
On the offensive
Hill inherited a company in free fall: negative 5% year-over-year revenue growth and the start of a 62% decline in earnings per share from its peak in May 2024. Since his first quarter as CEO in November 2024, earnings per share, a number investors are keeping a close eye on, have fallen 56% – to $1.51 per share – and operating income has fallen by half.
Nike brought Hill back to improve its relationships with retailers like Dick’s Sporting Goods after his predecessor, John Donahoe, aggressively pushed direct-to-consumer sales as part of a digital strategy developed by Hill said gave the Nike partners “the feeling that we had turned our backs on them.” And so Hill focused his tenure on rebuilding Nike’s shelf presence.
“Starting a sports offensive meant moving Nike from developing designs for women, men and children to designs for different types of athletes, taking a more “sports-focused” approach to maximizing innovation,” Hill explained at a press conference Interview in May 2026 at the Haas School at UC Berkeley. The earnings report was so clear in his mind last week when he told him about it FT that this restructuring took longer than expected. “The job isn’t done until it’s done,” Hill said. “I guess Wall Street will decide that, right?”
His efforts appear to be paying off in North America: Sales growth has increased 15 percentage points since its low point under Donahoe.
Nike’s World Cup moment
Part of Hill’s strategy was to bring Nike up to par Adidas on the world stage. While its rival is an official FIFA partner, Nike supplies 12 teams with jerseys and uses advertising to help them compete. He told investors on March earnings call that football is next in the sports offensive with the new Mercurial boots, Tiempo cleats and Aero FIT national kits, claiming that Nike is “using the World Cup as an opportunity to boost the football market for the coming quarters.”
Nike will compete against Adidas to get the best out of the World Cup together compete through advertising campaigns, with Nike featuring superstar athletes Cristiano Ronaldo, Kylian Mbappe and LeBron James (as opposed to Adidas ads featuring Lionel Messi). The Decades of rivalry It’s not just about bragging rights: It’s the first major global stress test of Hill’s approach to driving Nike demand. To achieve this goal, Nike also has has revised its previous playbook by including celebrities like Kim Kardashian and K-pop star Lisa in its “Rip the Script” ad campaign, which garnered over 78 million views, compared to 7.8 million for Adidas last month.
“There’s a reason why Nike is spending so much money on advertising campaigns at the World Cup.” David Swartza senior equity analyst at Morningstar said Assets.
The company said The aim of the ad was to give fans “something to talk about, worth cutting out, worth wearing, worth watching” – an apparent attempt to convert the enthusiastic culture surrounding the World Cup into Nike demand.
“Nike is very visible during the World Cup and can generate direct sales because people buy jerseys for the national teams and for the players they like,” said Swartz Assets. “In the long term, it is also a great branding opportunity to bring Nike back to the forefront of the sportswear world, where it has typically been but has fallen behind recently.”
From dominating shoes to declining sales
While Tuesday’s report showing North American growth is significant for Nike, Swartz said Assets that we regain market share in China – where Nike is lost to the Chinese shoe company Anta– is even more important. Today’s results show that Nike’s China results are weak but in line with expectations. Nike’s sales in China fell from over $7 billion (when Hill started) to $6 billion in February quarterly data and are expected to fall to $5.5 billion by August due to competition and inventory glut.
“Its profitability in China has just collapsed, which is a big problem because it has historically been the highest margin region for Nike,” Swartz said. “Investors’ biggest concern right now is probably how long it will take for Nike to turn things around in China.”
There’s also concern that Nike has fallen behind when it comes to innovation and has no new and exciting sportswear products to attract consumers, a problem exacerbated by tariffs and high gasoline prices that are putting pressure on consumer businesses in general. Swartz said retailers in China are also struggling to sell Nike goods, even at a discount, continuing the inventory glut and taking up shelf space that could be used for new products.
“Ultimately, Nike needs to offer more full-price sales and fewer discounts on its products to get its margins back up,” he added.