Nike Q1 Tops Estimates, Warns of $1.5B Tariff

Nike reported fiscal Q1 revenue growth of about 1% year‑over‑year (roughly $11.4–$11.7 billion) and adjusted EPS of $0.49, topping expectations and prompting premarket stock gains and analyst upgrades. The gain was driven by strength in running (up more than 20%), North America and wholesale, and management said early signs show CEO Elliott Hill’s “sport offense” reorganization — including a realignment of about 8,000 roles — is beginning to work. Significant weaknesses remain: direct‑to‑consumer revenue and Nike Digital traffic fell (DTC down ~3–4%, digital down double digits), China sales declined about 9%, sportswear and key franchises were soft, and Converse revenue plunged roughly 27%. Nike warned of a larger tariff headwind, now expected to be about $1.5 billion this fiscal year, and guided Q2 to low‑single‑digit revenue declines with notable gross‑margin pressure. Investors reacted with cautious optimism, raising price targets while stressing that a sustained turnaround depends on margin recovery and execution across China, DTC and Converse.