Nike Revenue Rises; Profit Drops on Tariffs

Nike reported fiscal Q1 revenue of $11.7 billion, up 1% year-over-year, and adjusted EPS of $0.49, sending the stock higher after hours. The revenue gain was driven by strength in North America, a 7% rise in wholesale to $6.8 billion and double-digit growth in Nike Running, even as Nike Direct fell 4% and Converse sales plunged 27%. Gross margin contracted about 320 basis points to 42.2% as higher discounts, lower average selling prices and rising tariffs weighed on profitability, while inventories slipped modestly. Quarterly profit fell about 31% to roughly $700 million. Management raised its estimated annual tariff headwind to roughly $1.5 billion and said the tariff-driven gross-margin hit for fiscal 2026 is now larger than previously forecast, and warned the recovery will not be linear given ongoing weakness in China and uneven returns across channels and categories.