Navigating Challenges with Strategic Growth …

This article first appeared on GuruFocus.

• Revenue: Up 1% on a reported basis, down 1% on a currency-neutral basis.

• NIKE Direct: Declined 5%, with NIKE Digital down 12% and NIKE Stores down 1%.

• Wholesale: Grew 5%.

• Gross Margin: Declined 320 basis points to 42.2%.

• SG&A: Down 1% on a reported basis.

• Effective Tax Rate: 21.1%, compared to 19.6% last year.

• Earnings Per Share: $0.49.

• Inventory: Decreased 2% versus the prior year.

• North America Revenue: Grew 4%.

• EMEA Revenue: Grew 1%.

• Greater China Revenue: Declined 10%.

• APLA Revenue: Grew 1%.

• Tariff Impact: Estimated gross incremental cost to NIKE on an annualized basis is approximately $1.5 billion.

Release Date: September 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Nike Inc (NYSE:NKE) reported a 20% growth in its Running business, showcasing strong performance in this segment.

• The company successfully launched a new partnership with SKIMS, which received strong early consumer response.

• Nike Inc (NYSE:NKE) saw double-digit revenue increases in redesigned retail experiences, such as the House of Innovation in New York.

• The company reported progress in North America, with Q1 revenue growing by 4% and wholesale growing by 11%.

• Nike Inc (NYSE:NKE) is making strides in inventory management, with inventory decreasing by 2% compared to the prior year.

• Nike Inc (NYSE:NKE) experienced a 10% decline in revenue in Greater China, facing structural challenges in the marketplace.

• The company’s gross margins declined by 320 basis points to 42.2% due to higher wholesale discounts and increased product costs.

• Nike Direct saw a 5% decline, with NIKE Digital declining 12% and NIKE Stores down 1%.

• The company faces significant cost headwinds from new tariffs, with an estimated gross incremental cost of $1.5 billion annually.

• Nike Inc (NYSE:NKE) is experiencing traffic and demand softness in EMEA, with promotional activity increasing across the industry.

Q: Elliott, can you discuss the progress of the spring order book and how it compares to the holiday book? Also, Matt, could you elaborate on the commitment to returning to double-digit margins over time? A: Elliott Hill, President and CEO, explained that Nike is focusing on leading with sport and leveraging its entire portfolio, with significant success in the Running segment, which grew over 20% this quarter. The spring order book is up year over year, indicating trust from partners. Matt Friend, CFO, added that while margins are pressured by product and channel mix headwinds, transitory impacts from Win Now actions, and new tariffs, they expect improvement in the second half of the year. Long-term, they aim for double-digit margins by reigniting organic growth and improving the full-price mix.