# Nike Earnings Surge on Tariff Refund, Yet Weak Sales and Tepid Outlook Dampen Sentiment

*Nike's latest earnings report shows a significant profit boost from a tariff refund, but shares fell due to weak sales in China and a cautious forecast.*

July 3, 2026 · business

## At a glance

- Nike's profit surged to $1.1 billion due to a $986 million tariff refund.
- Revenues fell one percent to $11 billion, and shares dropped two percent.
- Weak sales in China and a cautious forecast weigh on the company.
- Nike expects 'flattish' profit and low-to-mid single-digit revenue decline.
- CEO Elliot Hill remains committed to the Chinese market despite challenges.

Nike's earnings for the quarter ending May 30 were significantly boosted by a $986 million tariff refund, resulting in a $1.1 billion profit. However, the company's shares fell by two percent in after-hours trading due to weak sales in China and a tepid forecast. Revenues declined one percent to $11 billion.

## Tariff Refund Impact

The tariff refund, awarded after the US Supreme Court overturned some of President Donald Trump's tariffs, accounted for the majority of Nike's quarterly profit. This sum was approximately five times the earnings from the same period last year.

## Challenges in China

Nike continues to face significant challenges in China, where revenues fell 12 percent to $1.3 billion in the latest quarter. The company attributes this decline to intense competition from local brands. CEO Elliot Hill remains committed to the Chinese market, emphasizing the need for stronger local partnerships and culturally relevant products.

## Global Market Concerns

Nike reported a weakening in consumer activity across global markets midway through the quarter, partly due to affordability concerns amid rising oil prices caused by the US-Iran war. However, sales picked up in June, benefiting from the World Cup and a subsequent pullback in gasoline prices following a US-Iran memorandum of understanding.

## Cautious Outlook

Chief Financial Officer Matthew Friend indicated that Nike expects 'flattish' profit over the next two quarters, with revenues in the upcoming quarter projected to decline by low-to-mid single-digits. This cautious outlook reflects ongoing challenges and the company's efforts to pivot under new leadership.

## Expert Analysis

Neil Saunders, managing director of GlobalData, noted that sales drops in Greater China and the Europe-Middle-East-Africa region are concerning. He highlighted that a three percent rise in North America sales is promising but cautioned that Nike's full recovery remains distant.

## Sources

- BSS

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Source: https://pulsetoday.com.bd/en/business/nike-earnings-tariff-refund-china-sales-outlook