While Nike’s China problems are in the spotlight, weakness in Europe is also now at the forefront.
In the third quarter of fiscal 2026, Nike saw revenues drop 7 percent in its Europe, Middle East and Africa region mostly due to softness in its sportswear offering and a highly promotional retail environment.
Matthew Friend, executive vice president and chief financial officer at Nike Inc., told analysts on the company’s earnings call on Tuesday that EMEA presented “both progress and challenges” in the quarter.
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“Our performance business continued to build momentum, led by double-digit growth in running,” Friend said when referring to EMEA business. “Sportswear was down double digits and sell-through has not tracked with sell-in expectations. Promotions across the marketplace were up versus the prior year as partners manage inventory. We were also more aggressive with promotions on Nike Digital at the end of the season, which resulted in higher markdowns and a higher off-price mix. Inventory grew double digits versus the prior year with units up midsingle digits.”
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The CFO said the company anticipates ending the fourth quarter with elevated inventory in its EMEA region, but Nike “remains confident” that it will be able to continue to work through its Win Now actions in the territory.
Elliott Hill, president and chief executive officer of Nike, added on the call that its city-led approach to introducing new products is “especially important” to EMEA, where the company lacks a fully integrated marketplace.
“It has been one of our biggest hurdles,” Hill admitted. “The team is responding with a more complete street up-model, working more closely with wholesale partners to improve point-of-sale storytelling and seeding in the community. In EMEA, you’ll see us show up more as a local Nike.”
The overhaul comes after Nike made shifts to its EMEA leadership in January. The Swoosh announced earlier this year that César Garcia would become Nike’s new vice president and general manager of EMEA, effective Feb. 2, following the retirement of Carl Grebert after 30 years.
Hill noted at the time of the announcement that Garcia started at Nike nearly 25 years ago and has since built a “critical ability” to connect product, sport and marketplace into one integrated system. Most recently, the CEO wrote that Garcia helped integrate merchandising, sport priorities, and analytics to better serve athletes and scale innovation.
On Tuesday, the Beaverton, Ore.-based company reported net income in the third quarter of fiscal 2026 fell 35 percent to $520 million from $794 million in the year-ago period. Diluted earnings per share dropped to 35 cents from 54 cents.
Net sales in the period tallied $11.3 billion, flat from $11.3 billion on a reported basis and down 3 percent on a currency-neutral basis.
On Tuesday’s earnings call with analysts, Nike said it expects revenues in the coming fourth quarter to be down 2 to 4 percent, with modest growth in North America despite lapping a value liquidation in the prior year largely offset by declines in Greater China and Converse.
Wall Street didn’t love Nike’s fourth-quarter guidance, sending the stock down over 15 percent by end of trading on Wednesday.
The company said it will return to providing full-year and long-term guidance at its next investor day in the fall.