Nike posted stronger than expected fiscal Q1 results, sending shares up over 6% in Wednesday trading. Adjusted earnings came in at $0.49 per share, beating estimates of $0.28. Revenue rose 1% year-over-year to $11.7 billion, ahead of forecasts, though currency adjusted figures showed a slight decline.
The company’s wholesale segment surprised with 7% growth to $6.8 billion, reversing previous declines and outperforming expectations. Nike Direct, however, fell 4% to $4.5 billion, and is not expected to grow this fiscal year. CEO Elliott Hill credited “win-now” strategies focused on running, North America, and wholesale partners. Running saw a 20% revenue jump, and Nike plans to launch a new major footwear style each season.
Gross margins fell to 42.2%, pressured by higher discounts and rising tariffs. CFO Matthew Friend warned of a $1.5 billion tariff impact this year, with duties on Vietnam, Cambodia, and Indonesia climbing sharply. Nike expects Q2 revenue to decline slightly, with margins hit by up to 375 basis points. China remains a weak spot, with revenue down 10% amid sluggish foot traffic and heavy promotions. Despite margin pressure, Nike sees inventory progress and expects improvements in the second half.