The sports giant -- which plans product rollouts around the Olympics, World Cup and other major 2026 events -- stands "in the middle innings of our comeback," said CEO Elliott Hill, who pointed to revenue gains in North America as a strong point.

But Hill cited Greater China, which saw a 17 percent drop in revenues, as in need of further overhaul, saying improvements are "not happening at the pace we like."

"It's going to take a fresh perspective, a new approach," said Hill, who has reorganized his executive team so that the division's chief now reports directly to him.

"We will return Nike to a beloved, premium and innovative brand in China," Hill said.

Nike reported profits of $792 million, down 32 percent from the year-ago period. Revenues edged up one percent to $12.4 billion during the period, the second quarter of the company's fiscal 2026 calendar.

A robust performance in North America and the running franchise were assets during the quarter, according to Chief Financial Officer Matthew Friend, who said China had made progress that additional actions were needed to "break the cycle that we've been managing through," Friend said.

Friend said the company's inventory position has improved in North America compared with earlier quarters when a glut of merchandise depressed profit margins.

But tariffs remained a drag. Friend estimated a full-year tariff hit of $1.5 billion, the same as it projected in September.

Neil Saunders, managing director of GlobalData, said Nike's results show some progress but that the company must find ways to replicate its success in running across other sports.

Nike remains "behind the curve" in the casual and fashion areas, while weakness in China "reflects a brand that is not connecting culturally in a way that rivals are," Saunders said.

"All in all, we think Nike is making progress," Saunders said in the note. "However, this quarter's results underline how much work remains to be done."

Shares fell 10.5 percent in after-hours trading.