Tariffs, weak sales, and turnaround efforts weigh on the sneaker giant under new leadership
Nike (NKE) is set to report fiscal first-quarter results Tuesday after market close, with Wall Street bracing for a sharp profit decline as the sneaker giant navigates heavy tariff headwinds and a sweeping turnaround strategy under CEO Elliott Hill.
Analysts expect adjusted earnings per share of $0.28, a steep 60% drop from the same period last year, while revenue is projected to fall 4.9% to $11.02 billion, according to Bloomberg data. Nike Direct, its direct-to-consumer business, is forecasted to decline 8.3% to $4.3 billion, while wholesale revenue is also expected to contract nearly 8% to $6.28 billion.
The company’s namesake brand is projected to see sales down 5% to $10.55 billion, while Converse revenue could fall 9% to $456 million. These losses would still mark modest improvements from steeper declines reported in the prior quarter.
“Nike is making the right moves by cleaning up inventory, increasing newness, and strengthening wholesale relationships,” said Telsey Advisory Group analyst Cristina Fernández. “However, the brand still seems a few quarters away from reaching stabilization.”
Tariffs remain a significant drag. CFO Matthew Friend previously estimated gross incremental costs at $1 billion, but rising levies on imports from Vietnam, Cambodia, and Indonesia could push the impact closer to $1.5 billion. Nike projects gross margins to fall by 350–425 basis points, with about 100 tied directly to tariffs.
Nike is working to reduce its reliance on China, which currently supplies 16% of U.S.-bound shoes, targeting a cut to the high-single digits by year’s end. A “surgical price increase” in the U.S. is also planned for this fall.
Despite these challenges, analysts note that product innovation—including the launch of NikeSKIMS—and inventory discipline could help Nike recover momentum ahead of major global events like the 2026 World Cup.
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