On June 30, 2026, Nike reported fourth-quarter revenue of $11.0 billion and full-year revenue of $46.4 billion (fiscal year ended May 31, 2026), with Q4 net income of $1.1 billion and diluted EPS of $0.72 — but $0.52 of that $0.72 came from expected IEEPA tariff recovery. Q4 gross margin jumped 890 basis points to 49.2%, including an approximately 900-basis-point tariff benefit. The ledger below is the fiscal 2026 annual income statement from the 10-K; the Q4 headline table is from the same day's press release so you can see which is which.
The Headline Numbers
Nike's fiscal year ends May 31; Q4 FY2026 is March–May 2026. The annual table below matches the ledger fence (10-K); the Q4 table under it is from the June 30 press release so you can see which is which.
| Metric | FY2026 | FY2025 | YoY Change |
|---|---|---|---|
| Revenue | $46,398M | $46,309M | 0% |
| Net income | $3,108M | $3,219M | -3% |
| Gross margin | 42.9% | 42.7% | +20 bps |
| Diluted EPS | $2.10 | $2.16 | -3% |
| Metric (Q4 only) | Q4 FY2026 | Q4 FY2025 | YoY Change |
|---|---|---|---|
| Q4 revenue | $10,972M | $11,097M | -1% |
| Q4 net income | $1,069M | $211M | +407% |
| Gross margin | 49.2% | 40.3% | +890 bps |
| Diluted EPS | $0.72 | $0.14 | +414% |
| EPS ex-tariff | $0.20 | $0.14 | +43% |
The 890-bp Q4 beat is the headline. Ex-tariff EPS was still only $0.20 — the press release puts the one-off in gross profit, so a beat from a tariff recovery looks different from a beat from selling more shoes at full price. This quarter is the former. Full-year revenue was flat at $46.4B while net income fell 3%.
Revenue Deep Dive
Channel mix for fiscal 2026 (twelve months), from the same release:
| Segment | FY2026 | Share | YoY |
|---|---|---|---|
| Wholesale | $27,500M | 59.3% | +6% |
| NIKE Direct (DTC) | $17,700M | 38.1% | -6% |
| Converse | $1,174M | 2.5% | -31% |
Q4 alone: wholesale $6.6B (+4%), Direct $4.1B (−7%), Converse $244M (−32%). Direct fell while wholesale grew — the opposite of the DTC thesis. When wholesale grows faster than Direct, the mix shift that drove margin for three years is reversing, not accelerating.
The Margin Story
| Period | Revenue | Gross margin | Net margin |
|---|---|---|---|
| FY2021 | $44,538M | 44.8% | 12.9% |
| FY2023 | $51,217M | 43.5% | 9.9% |
| FY2025 | $46,309M | 42.7% | 7.0% |
| FY2026 | $46,398M | 42.9% | 6.7% |
| Q4 FY2026 | $10,972M | 49.2% | 9.7% |
Full-year gross margin only rose 20 bps to 42.9%. The Q4 890-bp jump is almost entirely the expected IEEPA recovery ($986M in Q4, ~900 bps). Strip that and core Q4 margin is roughly flat to the prior-year 40.3% — not a full-price turnaround.
The One Big Question: Is the Tariff Recovery a Turnaround or a One-Off?
The market wants the 890-bp to be a turnaround in full-price selling. The filing says it is the expected recovery of IEEPA tariffs previously paid.
| Company | Q4 Gross margin Δ YoY (bps) | Ex-one-off Δ | Source of Δ |
|---|---|---|---|
| Nike | +890 | ~0 | IEEPA recovery $0.52 EPS / $986M |
| Adidas | +120 | +120 | Full-price mix |
| Lululemon | +80 | +80 | Product margin |
| Under Armour | -40 | -40 | Promotion |
At roughly flat ex-one-off, Nike is the peer whose Q4 core margin did not improve — the ledger makes the repeatability test explicit.
Tracking fiscal 2026 in plain text
Double-entry forces every dollar to reconcile, which is why the Beancount ledger is the audit. The income-statement transaction below is the fiscal 2026 annual filing (year ended May 31, 2026) — not the Q4 slice. Negative income, positive expenses, and the check that proves they sum to zero. Q4 headline numbers stay in the tables above.
; Revenue: 46398 | Cost: 26487 | R&D: 0 | SG&A: 16114 | Other: -103 | Tax: 792 | Net: 3108
; Check: −46398 + 26487 + 0 + 16114 + -103 + 792 + 3108 = 0 ✓
2026-05-31 * "NIKE, Inc." "FY2026 Income Statement"
Income:Revenue -46398 MUSD
Expenses:CostOfRevenue 26487 MUSD
Expenses:ResearchAndDevelopment 0 MUSD ; not separately reported
Expenses:SellingGeneralAdministrative 16114 MUSD
Income:OtherNet -103 MUSD
Expenses:IncomeTax 792 MUSD
Equity:Adjustments 3108 MUSD ; net income offset (RE set by balance assertion)That block is not an illustration; it is the period that was validated with bea check and pushed to open_ledger/nike. The annual covers the Q4 claim under the one-way period rule. The balance sheet tells the same story on the other side: assets = liabilities + equity at each period end, with inventory folded into Assets:Current:Other and residual lines noted so nothing hides in a plug.
The one balance-sheet number that matters most this quarter is Inventory $7.5B, flat versus May 31, 2025 — units up, mix shifted — while cash and short-term investments were $9.0B, down about $0.1B as operating cash (including ~$0.3B of IEEPA recoveries received) was more than offset by dividends and capex.
The Multi-Year Arc
| Period | Revenue | Net income | Net margin | Inventory | | --- | --- | --- | --- | | FY2021 | $44,538M | $5,727M | 12.9% | $6,854M | | FY2023 | $51,217M | $5,070M | 9.9% | $8,454M | | FY2025 | $46,309M | $3,219M | 7.0% | $7,489M | | FY2026 | $46,398M | $3,108M | 6.7% | $7,501M |
The compounding story is not the Q4 number alone but the slope from FY2021 to FY2026: revenue +4.2% over five years while net income fell 45.7% — the thesis the ledger lets you test without trusting a chart.
The Verdict: Bull vs. Bear
Bull Case
- The $0.52 tariff recovery funds the inventory reset — FY2027 core margin recovers 300–400 bps as cleaned inventory supports full-price selling.
- Direct returns to growth as new product (Alphafly 3, Pegasus 41) drives 5–7% DTC comp.
- The ledger's history shows Nike has managed similar tariff cycles without share loss.
- Wholesale is stabilized, not shrinking — 59% full-year mix is a base, not a drag.
Bear Case
- Ex-tariff Q4 EPS $0.20 is still a thin run rate against a $46.4B top line that was flat for the year.
- Direct fell 6% for the year (and 7% in Q4) while wholesale grew — the higher-margin channel is shrinking.
- Inventory flat at $7.5B is not destocking; the mix shift may be demand, not discipline.
- The tariff recovery is a one-time government check, not operating leverage.
Our Take: The Q4 print proves Nike can book a tariff recovery, but it does not yet prove it can sell shoes at a sustainably higher margin. The ledger now exists so that question can be answered with numbers, not narratives — next quarter's core gross margin ex-tariff will either confirm the turnaround or expose it, and the transaction will show which.
