Nike stock rises 5% as earnings, sales top forecasts, company continues progress with turnaround

Core Insights - Nike reported fiscal first quarter results that exceeded expectations, driven by a turnaround strategy under CEO Elliott Hill and the impact of President Trump's tariffs [1][2] Financial Performance - Adjusted earnings per share were $0.49, surpassing Wall Street estimates of $0.28 [2] - Revenue increased by 1% year-over-year to $11.7 billion, exceeding the expected $11.02 billion; however, revenue fell by 1% when adjusted for currency impacts [2] - Nike Direct revenue decreased by 4% to $4.5 billion, better than the expected drop of 8.3% [3] - Wholesale revenue rose by 7% to $6.8 billion, contrary to the forecasted decline of 8% [3] - Sales for the Nike brand grew by 2% to $11.4 billion, while Converse sales fell by 27% to $366 million, significantly worse than expectations [4] Margin and Tariff Impact - Gross margins decreased by 320 basis points to 42.2%, better than the expected 41.7% but down from 40.3% in the prior quarter [5] - The company anticipates a $1.5 billion impact from tariffs, an increase from the previous estimate of $1 billion [5] - Tariffs are expected to affect gross margin by 120 basis points for fiscal year 2026, up from 75 basis points [6]