Nike beat Wall Street's expectations — but a closer look shows a turnaround still very much in progress.

A beat, with an asterisk

Nike reported fiscal fourth-quarter revenue of about $11.0 billion, down 1 percent from a year earlier but ahead of the roughly $10.86 billion analysts expected, CNBC reported. Reported earnings came in at $0.72 a share — far above the $0.13 consensus — but most of that was a one-time item: Nike recorded a $986 million recovery of tariffs it had paid, money it expects back after courts struck down parts of the Trump administration's import-duty program, according to its results. Stripping out that windfall, adjusted earnings were about $0.20 a share — still ahead of estimates, but a far more modest beat. The refund also inflated gross margin, which jumped to 49.2 percent.

China stays weak

The clearest sign the recovery is unfinished came from Greater China, where quarterly sales fell 12 percent to about $1.3 billion, CNBC reported. The region has now contracted for several straight quarters amid weak consumer demand and stronger domestic Chinese sportswear rivals. Chief Executive Elliott Hill acknowledged the shortfall, saying Nike is "not living up to our full potential" in key categories but is "fully committed" to winning China back.

The turnaround scorecard

Hill, who took over in late 2024, has built his plan around rebuilding relationships with wholesale retail partners that Nike had pulled away from, refocusing on running and sport performance, speeding up product innovation, and clearing out excess inventory. There was measurable progress: wholesale revenue rose in the quarter while Nike's own direct-to-consumer sales fell, reflecting the deliberate shift back toward retail partners. North America, the company's biggest market, grew over the full year. The Converse brand remained a weak spot, with sales down sharply.

Guidance and the stock

Management struck a cautious near-term tone. The finance chief signaled revenue would be down in the low single digits over the next nine months, with margins expected to improve later in the new fiscal year, and Nike held off on issuing full-year guidance, promising a longer-term outlook at an investor day in the fall. Investors were unimpressed by the headline beat: Nike shares fell sharply in extended trading after the report, a sign of skepticism about the pace of the recovery and the soft outlook — even as the tariff refund offered a one-quarter cushion against an import-cost burden that has run into the billions.