Nike Shares Surge as Strong Q1 Earnings Signal Turnaround Momentum
Nike Shares Surge as Strong Q1 Earnings Signal Turnaround Momentum
Nike (NKE) shares experienced a significant surge in after-hours trading on Tuesday, October 1, 2025, following the release of its fiscal 2026 first-quarter results, which substantially surpassed Wall Street’s expectations. The robust performance signals that CEO Elliott Hill’s ambitious turnaround strategy is rapidly gaining momentum.
For the first quarter of fiscal 2026, Nike reported total revenue of $11.72 billion, marking a 1% increase year-over-year and comfortably beating analyst estimates of approximately $11 billion. While earnings per share (EPS) saw a 30% decline from the prior-year period to 49 cents, this figure still managed to surpass the consensus forecast. The positive news sent Nike’s stock climbing more than 4% to around $72.66 per share in extended trading, recovering significantly after a nearly 10% drop in September’s regular sessions.
The sportswear giant’s renewed focus on its most critical categories, key geographies, and major cities, coupled with a strategic pivot back to vital retail partners, is proving effective. This shift, following an overemphasis on its direct-to-consumer business under previous leadership, is driving sales growth. Notably, Nike’s North America wholesale business returned to growth, increasing 5% year-over-year on a currency-neutral basis. The successful re-engagement with partners like Dick’s Sporting Goods and the performance of the Nike Brand Store on Amazon, which returned to wholesale selling earlier this year, were highlighted as key drivers.
Innovation also played a crucial role, with CEO Hill emphasizing the “Win Now” initiative. The running category, in particular, demonstrated strong growth exceeding 20% this quarter, attributed to a “sport offense” strategy designed to bring the company closer to athletes.
Despite the positive momentum, Nike acknowledges ongoing challenges. The company updated its estimate for the annualized incremental cost from tariffs to approximately $1.5 billion, up from $1 billion, which will impact gross margins by roughly 120 basis points. Efforts to mitigate this include sourcing optimization and reducing China footwear imports. Additionally, segments like Greater China and the Converse brand still require significant work to return to profitable growth.
Looking ahead, management provided second-quarter guidance that, while predicting a low-single-digit revenue decline, was deemed “better than feared” by analysts, largely due to the expected tariff headwinds. Furthermore, Nike shared bullish updates for the remainder of the fiscal year, including an increase in its spring order book and the expectation for the wholesale business to achieve modest growth for the full fiscal year, reinforcing confidence in the current strategic direction.
Disclaimer: This content is aggregated from public sources online. Please verify information independently. If you believe your rights have been infringed, contact us for removal.