Nike margin rebound puts footwear rivals on notice
- Nike reported Q4 fiscal 2026 revenue of $11 billion, down 1% on a reported basis and down 4% on a currency-neutral basis.
- Gross margin rose 890 basis points to 49.2%, mainly due to an approximately 900 basis point benefit tied to expected IEEPA tariff recovery.
- The main sector issue is whether athletic brands can protect margins while wholesale demand, direct sales, tariffs, and cautious consumers reshape growth.
Nike (NYSE:NKE)
Nike (NYSE:NKE) is the anchor stock in this margin-driven footwear story. Its Q4 fiscal 2026 report showed flat-to-lower sales, but a sharp gross margin rebound.
Revenue was $11 billion, down 1% on a reported basis and down 4% on a currency-neutral basis.
Wholesale revenue was $6.6 billion, up 4% reported and up 1% currency-neutral.
NIKE Direct revenue was $4.1 billion, down 7% reported and down 9% currency-neutral.
That split matters because Nike has been trying to balance wholesale recovery with direct-to-consumer pressure.
Gross margin rose 890 basis points to 49.2%.
Nike said the result included an approximately 900 basis point benefit from the expected recovery of International Emergency Economic Powers Act tariffs.
Diluted EPS was $0.72.
Nike said that included a $0.52 benefit tied to the expected tariff recovery.
For full fiscal 2026, revenue was $46.4 billion, flat reported and down 2% currency-neutral.
Adidas (XETRA:ADS)
Adidas (XETRA:ADS) is Nike’s closest global footwear and sportswear rival.
It competes across running, football, lifestyle sneakers, apparel, wholesale, and direct channels.
In Q1 2026, Adidas reported net sales of €6.6 billion.
Currency-neutral sales grew 14%, while operating profit rose 16% to €705 million.
Gross margin fell 100 basis points to 51.1%.
Adidas said stronger full-price sales and a better business mix were more than offset by currency moves and higher U.S. tariffs.
The comparison with Nike is direct.
Both companies are managing U.S. tariff effects, wholesale exposure, and changing consumer demand.
Adidas entered 2026 with stronger top-line growth, while Nike’s Q4 margin was lifted by a tariff recovery benefit.
Deckers Outdoor (NYSE:DECK)
Deckers Outdoor (NYSE:DECK) is a footwear peer through HOKA and UGG.
HOKA makes Deckers especially relevant to Nike’s running and performance footwear business.
In Q4 fiscal 2026, Deckers reported revenue of $1.12 billion, up 10%.
Full-year fiscal 2026 revenue rose 10% to $5.47 billion.
HOKA sales increased 14.5% to $671.2 million in the quarter.
UGG sales increased 9.2% to $408.6 million.
Deckers said it expects fiscal 2027 revenue growth in the high-single-digit percentage range.
It also guided diluted EPS of $7.30 to $7.45.
The key comparison is growth quality.
Nike remains much larger, but Deckers has been gaining from focused footwear brands with strong consumer demand.
On Holding (NYSE:ONON)
On Holding (NYSE:ONON) is another performance footwear peer.
It competes in running, lifestyle footwear, apparel, and premium athletic products.
In Q1 2026, On reported net sales of CHF 831.9 million, up 14.5% reported and up 26.4% currency-neutral.
Shoes generated CHF 763.7 million in sales.
Gross profit margin increased to 64.2% from 59.9%.
Adjusted EBITDA rose 45.4% to CHF 174.3 million.
On said it expects full-year 2026 constant-currency net sales growth of at least 23%.
It also raised its gross profit margin outlook to at least 64.5%.
For Nike, On shows the pressure from smaller premium running brands.
On is much smaller by revenue, but its faster sales growth and higher gross margin make it an important comparison.
Lululemon Athletica (NASDAQ:LULU)
Lululemon Athletica (NASDAQ:LULU) is a premium athletic apparel peer.
It overlaps with Nike in training, running, women’s activewear, lifestyle apparel, and direct retail.
In Q1 fiscal 2026, Lululemon reported net revenue of $2.5 billion, up 4%.
Americas revenue fell 3%, while international revenue rose 22%.
Gross margin fell 410 basis points to 54.2%.
Income from operations fell 37% to $276.9 million, and diluted EPS declined to $1.69.
The company said it expects Q2 fiscal 2026 revenue of $2.450 billion to $2.475 billion.
That would represent a decline of 3% to 2%.
The comparison with Nike is about premium demand.
Lululemon still has a high gross margin, but its U.S. softness shows that even strong athletic brands face pressure from price, product cycles, and consumer caution.
The bottom line
Nike’s Q4 headline was not strong revenue growth. It was margin recovery.
The 49.2% gross margin was heavily influenced by an expected tariff recovery, while direct sales remained under pressure.
The five stocks show the same industry divide.
Adidas and On are growing faster.
Deckers is using HOKA and UGG to drive focused footwear gains.
Lululemon is still profitable but facing slower U.S. demand.
Nike remains the largest brand in the group, but the key test is whether margin recovery can turn into cleaner growth without relying on one-time tariff benefits.
