Why Nike Stock Is Plunging in After-Hours Trading
Key Points
Nike reported second-quarter financial results for fiscal 2026.
The company surpassed analysts' top- and bottom-line expectations.
Nike's 'Win Now' initiative aims to return the company to growth mode.
After essentially remaining flat during today's market session -- shares were down 0.09% at 4:00 p.m. -- Nike (NYSE: NKE) stock is racing lower in after-hours trading. The athletic apparel retailer reported second-quarter 2026 financial results after the bell rang this afternoon, and investors are clearly unpleased with the company's performance.
As of 5:57 p.m., Nike stock was down 10.2% from where it ended after today's regular trading session.
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Nike sported strong headline figures -- but not enough to impress the market
Beating analysts' expectations that it would report $12.2 billion, Nike posted second-quarter fiscal 2026 sales of $12.4 billion, a 1% year-over-year increase.
At the bottom of the income statement, Nike provided another surprise. Whereas analysts had anticipated the company reporting diluted earnings per share (EPS) of $0.37, the company posted Q2 2026 EPS of $0.53.
While it exceeded profit expectations, investors are balking at the company's inability to expand its profit margin. Apparently, many investors had high hopes that Nike's Win Now initiative, aimed at optimizing its operations and driving bottom-line growth, would bear fruit in the second quarter of fiscal 2026. This wasn't the case, though. Nike reported a Q2 2026 net profit margin of 6.4% -- narrower than the 9.4% net profit margin generated during the same period last year.
If Nike stock continues to tumble, a buying opportunity may arise
Nike has encountered some headwinds lately, but it'd be wholly unwise to speculate that the company will fail to right the ship, considering the formidable brand it has developed. With the market punishing Nike stock immediately after the Q2 2026 financial results report, prospective investors would be wise to keep a close eye on what happens in the coming days. For those with Nike stock on their watchlists, a sustained decline in the stock price could present an excellent opportunity to buy shares at a more attractive price.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.