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The U.S. stock market has been volatile over the past year, with swings driven by factors including tariffs and an oil-price shock that began around the start of the Iran war. Those pressures have had knock-on effects for consumer spending and have weighed on consumer-sector stocks such as Nike (NYSE: NKE). For investors considering Nike for the long term, the key question is whether recent headwinds are temporary or reflect deeper company challenges.
Tariffs have weighed on Nike’s results this fiscal year. For the first nine months of the year ended Feb. 28, the company’s gross margin contracted by 2.5 percentage points. Management attributed most of the margin decline to higher product costs tied to higher tariffs in North America.
Nike’s third quarter ended on the day the Iran war started. As a result, the spike in oil prices—and the subsequent rise in gas prices—was not reflected in that quarter’s results. However, consumers are likely to feel the squeeze, particularly given stubbornly high inflation.
On a revenue basis, Nike’s total revenue—adjusted to remove foreign-currency exchange translation effects—fell 1% over the first three quarters of the year.
While some of the revenue decline can be linked to broader economic conditions, company-specific factors have also contributed.
On the positive side, Nike’s leadership has focused on rebuilding relationships with wholesalers that were neglected during the company’s direct-to-consumer push. In the current year, adjusted wholesale revenue increased 5%, while direct revenue declined 7%.
That improvement is offset by other issues. Nike-branded footwear—representing 63% of the company’s revenue—declined 1% after removing foreign-currency translation effects. Management also pointed to lower selling prices as a factor pressuring the top line.
Management further attributed part of the revenue decline to weakness in the Greater China region, where intensifying competition has played a role.
Nike has been working to address its revenue decline, including launching its “Win Now” strategy at the end of 2024, with an emphasis on new and innovative products. The company’s challenge is that regaining customers can be difficult once they move on, which remains central to driving revenue growth.
As of April 16, 2026, Nike’s share price has returned -27.8%, compared with a 4% return for the S&P 500 index. Despite the underperformance, the article advises pausing before aggressively buying the stock.
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