‘Signs of progress’: Nike results suggest rebuild is working

Nike sign — Nike veteran Carl Grebert has retired, with new appointments. (Source: Bigstock)

By Sean Cao December 19, 2025

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Nike has reported a modest uplift in sales for the second quarter, which an analyst considered a sign of progress in the company’s turnaround efforts.

The sportswear giant saw revenues increase 1 per cent to $12.4 billion during the quarter ended November 30. On a currency-neutral basis, sales remained flat.

Wholesale revenues were up 8 per cent to $7.5 billion, while direct-to-consumer sales fell 8 per cent to $4.6 billion.

According to GlobalData MD Neil Saunders, the quarter’s numbers are fair and show some signs of progress.

“Just as it would be unreasonable to expect a record finish time from a marathon runner who is still recuperating from the flu, it is unreasonable to expect Nike to be producing robust numbers when it is mid-way through its recovery program,” he said.

In North America, revenue grew by a solid 8.8 per cent, thanks to better traction in the running category.

According to Saunders, the remaining challenge is for Nike to replicate this success across other sporting divisions.

This is something the retailer is working on, he continued, adding that the results would start to deliver towards the end of this fiscal year.

Meanwhile, the company continued to struggle in the Chinese market, with sales falling for the sixth straight quarter.

“While conditions in the country are challenging, Nike’s performance is particularly dire and reflects a brand that is not connecting culturally in a way that rivals are,” he said. “Again, this is a more entrenched problem that will take some time to resolve.”

The company’s gross margin during the quarter decreased 300 basis points to 40.6 per cent.

Management attributed the drop to poor sales in China, the investments put into the turnaround plans, and the significant impact of tariffs. They also expect margins to fall between 175 and 225 basis points in the third quarter.

Net income for the period was down 32 per cent to $800 million.

“All in all, we think Nike is making progress and we are pleased with management reshuffles and the improved focus on getting Nike back to its roots as an innovative sporting brand,” said Saunders.

“However, this quarter’s results underline how much work remains to be done and show that the path to better performance will not be one that proceeds on a straight line.”