Nike turnaround takes root, signaling new era of growth

Nike has reportedly seen an unexpected surge in first quarter revenue and beat profit expectations as the storied sportswear brand’s turnaround effort gained traction despite weakness in China and tariffs narrowing profit margins.

The shares rose 3.4% in volatile trading, with wholesale revenues returning to growth-an early sign of success for CEO Elliott Hill’s plan to get Nike back to its former glory.

In this connection, CEO Hill, a Nike veteran, took command last year and committed to focusing on core sports and producing cutting-edge products for which Nike has been known.

Nike forecast second-quarter revenue to fall in the low-single digits, compared to a 3.1% drop in the same period last year.

It has been observed that the struggling supplier will also record growth for fiscal 2026.

The margins will face a significant drag from highest costs of products due to tariffs; meanwhile, wholesale revenues rose 5% on a current neutral basis.

The company’s first-quarter revenue rose 1% to11.72 billion. Based on data compiled by LSEG, analysts had forecast a fall 5.1% to $11 billion.

The company's strategic initiatives involve focusing on direct consumer sales and innovation.

Separately, Nike reported first-quarter earnings per share of 49 cents, beating an estimate of 27 cents.

It gained ground in mitigating inventory levels in the quarter; however, the company’s gross margin reduced by 320 basis points to 42.2 %, following a 440-basis-point fall in the prior three months period.