Nike Beats Q2 Earnings Estimates Despite 12% Sales Drop in China

Nike reported its second-quarter fiscal results after Wall Street closed, surpassing analysts' expectations despite a continued decline in sales in the Chinese market. The sportswear giant posted an adjusted earnings per share of 20 cents, exceeding the average analyst forecast of 13 cents. Revenue totaled $10.97 billion, down 1% from the same period last year but above the $10.86 billion expected by analysts.

The company attributed an 8.9% increase in gross margin primarily to a nearly $986 million tariff refund, resulting from a U.S. Supreme Court decision that invalidated a significant portion of tariffs imposed during the Trump administration. This refund was not factored into analysts' earnings estimates. Net income for the quarter reached $1.07 billion, or 72 cents per share, compared to $211 million, or 14 cents per share, in the prior year period.

Nike's revenue in North America, its largest market, rose 3% to $4.83 billion, slightly below the $4.88 billion analysts had predicted. Meanwhile, sales in China fell by 12% to $1.3 billion, though this was still above the forecasted $1.24 billion. The results highlight Nike's resilience amid challenges in the Chinese market and favorable impacts from tariff rulings in the U.S.