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Nike’s Q1 Revenue Tops $11.7 Billion, Tariffs May Cut $1.5 Billion From Margins
Nike (NYSE: NKE) has announced results for its fiscal first quarter, and it’s ahead of market expectations. The shoe giant's adjusted earnings per share (EPS) came in at $0.49, ahead of the projected EPS of $0.28, with revenues of $11.7 billion, growth ahead of the consensus estimate of $11.02 billion. Following the announcement, NKE's price moved up more than 3% in premarket trading on October 1, 2025, in response to the unexpected beat.
Wholesale Strength, Direct-to-Consumer Pressure
Nike's wholesale business grew 7% to $6.8 billion, significantly recovering from declines seen in prior quarters, exceeding expectations for a drop in sales. While revenues from the direct-to-consumer segment dropped 4% to $4.5 billion, ahead of expectations for an 8% drop, sales from direct-to-consumer continue to lag behind overall sales. CEO Elliott Hill attributed early gains in priority categories like running, North America, and wholesale partnerships.
Nike share price chart on Moneycontrol shows gains of 0.20% in pre-market trading at press time:
The Nike brand recorded sales up 2% to $11.4 billion, beating expectations of a 5% decline. Converse, however, continued to lag, with sales falling 27% to $366 million.
Tariff Impact Looms Large
Gross margins narrowed 320 basis points to 42.2%, dragged down by increased tariffs and discounts. CFO Matthew Friend cautioned that tariffs, now affecting nations such as Vietnam and Indonesia at up to 46% and 19% rates, will cost the firm $1.5 billion in fiscal 2026, squeezing margins by 120 basis points.
Strategy: Innovation and Cost Shifts
To counteract increased expenses, Nike is relocating production out of China and considering selective US price increases. The company is also relying on innovation, especially in running, where revenue jumped 20%. In the near term, Nike anticipates Q2 revenue will dip a little and gross margins will see additional pressure from tariffs.
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