• by Sarah Mahoney , April 1, 2026

Looks like Nike still has a long way to go in its turnaround. While the company announced sales and profits that beat expectations, it surprised observers by warning that sales would continue to decline for the remainder of the fiscal year, underscoring just how far the company still needs to go to outrun its past problems.

Third-quarter revenues were flat at $11.3 billion, while wholesale revenues rose 5% to $6.5 billion. In North America, sales gained a promising 3%. Nike Direct sales sank 4% to $4.5 billion, with a 9% drop in digital sales and a 5% dip at Nike stores.

Those numbers actually came in a bit better than Wall Street expectations. But the jolt came from the company's guidance: Nike expects sales in the current quarter to fall between 2% and 4%, compared with analyst expectations of nearly 2% growth, with revenues still expected to be down in the low single digits for the full fiscal year.

"This is complex work, and parts of it are taking longer than I'd like," said CEO Elliott Hill on the company's earnings call.

Describing Nike's progress as "one step forward, two steps back," Deutsche Bank analyst Krisztina Katai writes that the outlook was even worse than some of the more bearish projections. Among the letdowns: More adjustments in China are likely to result in yet another sales drop in the region, perhaps as much as 20%, and sales in Europe and the Middle East are still lackluster.

While encouraged by "numerous green shoots," Katai notes that Nike's "turnaround remains fluid, and more progress needs to be made before investors can fully underwrite a full-fledged return to growth."

One of the quarter's bright spots was the launch of the Nike Mind collection — the Mind 001 mule and Mind 002 sneaker — featuring neuroscience-backed technology designed to help athletes clear away distractions through underfoot stimulation. Both styles sold out immediately in all regions. "We've responded by doubling production of Nike Mind over the next two seasons, to meet demand from more than 2 million consumers who've signed up for 'Notify Me' on Nike.com," Hill said.

Nike also highlighted the recent success of NBA All-Star Weekend, which drove full-price sell-throughs while deepening wholesale partnerships in Los Angeles with Shoe Palace, Dick's and Foot Locker, as well as positive results from activations around the Winter Olympic Games.

Others are more optimistic about the broader turnaround. While acknowledging that the transformation is "frustratingly slow," Morningstar's David Swartz thinks Nike can complete its "Win Now" transformation agenda — which includes continued inventory reduction — by the end of the calendar year. "We believe that this is realistic based on aggressive channel clean-up actions that are ongoing and product release plans."

Then there is the unresolved problem of Converse, where sales fell yet again, plummeting 35% for the quarter to $264 million. Earlier this week, reports surfaced that Authentic Brands Group, the brand management giant known for rescuing troubled brands like Reebok and Champion, would consider buying Converse. On the call, Hill reiterated that Nike is committed to the brand and acknowledged the layoffs and restructuring made at the division recently.

"The team took some decisive steps this quarter to bring the brand back to a healthy business," he said. "Converse is a beloved brand that serves a distinct consumer through their connection to creative culture, music and youth. Converse will remain an important part of the Nike family and we are excited about its long-term prospects."

For now, investors aren't buying it. Nike shares fell sharply after the earnings call.