Nike flies on Wall Street over 5% after the first quarter fiscal 2026 resultsThe American sportswear giant closed the period (ended August 31, 2025) with revenues equal to 11,7 billion dollars, significantly exceeding analysts' estimates of 11 billion (-5,1%). gross margin stood at 42,2%, above the expectations of 41,7%, penalised however by lower average prices, a broader mix of channels and duties in North America, estimated at $1,5 billion this year.
Nike: Revenues Above Expectations, Margins Under Pressure
In the first three months of fiscal year 2026, the revenues Nike's total revenue reached $11,7 billion (+1% on a reported basis, -1% at constant exchange rates). gross margin stood at 42,2%, down 320 basis points, due to lower average prices, a broader channel mix and higher tariffs in North America.
The Net income stopped at 727 million dollars (-31%), with a earning per share of $0,49, above the forecast of 27 cents.
The CEO Elliott Hill, Returning to the helm of the company to lead the recovery, he commented: “This quarter, Nike led progress in the key areas of North America, Wholesale and Running. The results are encouraging, but work continues to align performance and channels in a challenging operating environment.” Hill also highlighted the successful revamp of three running shoe lines—Vomero, Structure, and Pegasus—which helped increase sales in the category by more than 20%.
For current quarter, the company plans a drop in sales in low single digits (around -3%) and a further contraction in the margin of up to 3,75 percentage points, confirming that the recovery will be gradual.
Sales channels and brands
Il direct-to-consumer channel recorded a 4% decline to 4,5 billion dollars (3,8 billion euros), with digital down 12% and single-brand stores slightly down 1%. In contrast, the channels Wholesale grows by 7% to 6,8 billion dollars (5,8 billion euros).
The brand CONVERSE recorded a 27% decline to $366 million, while inventories shrank to $8,1 billion, down 2% from a year ago. The impact of US tariffs, combined with past strategies focused on direct sales at the expense of retail partners and an excessive focus on fashion items, has impacted the brand's profitability and shelf presence.
On the organizational front, Hill has initiated an internal restructuring, cutting approximately 1% of the workforce and reallocating 8.000 employees, with the aim of strengthening the sports lines while maintaining the lifestyle segment as a lever to expand the female customer base, also thanks to the partnership with Kim Kardashian's Skims, which has had a positive start.
Performance by geographic area
The Nike brand alone posted revenues of $11,4 billion (€9,7 billion), up 2% compared to the same period last year. North America leads the growth with a +4%, thanks to the contribution of apparel +11% and equipment +16%, while Europe, Middle East e Africa recorded an overall growth of 6%, mainly supported by clothing. China It remains the weakest market, with a decline of 9%, particularly in footwear (-11%) and equipment (-32%). The company's overall liquidity remains solid at $8,6 billion, although down about $1,7 billion from the previous year.
Analysts optimistic but cautious
Following the results, several analysts updated their price targets for Nike. Morgan Stanley raised its target to $72 and confirmed an Equalweight rating, noting the company's financial resilience and 23 consecutive years of dividend increases. stifel raised the target to $68, Hsbc at 90 dollars, while Rbc Capital confirms the Outperform rating with a $90 target. Wells Fargo Instead, it maintains an Equal Weight rating with a target of $60, highlighting mixed quarterly results.
Despite short-term optimism, Morgan Stanley and other observers they remain cautious on a return to previous historical growth levels and margins, citing an increasingly fragmented global sportswear market that could limit long-term growth potential.
