After Returning to Top-Line Growth, Is It Time to Buy Nike Stock?

Core Insights - Nike is showing signs of a rebound with a return to revenue growth in Q1 of fiscal 2026, reporting a 1% increase to approximately $11.7 billion [4] - The company's shares have recovered from recent lows as investors respond positively to the new leadership's turnaround strategy [1] Revenue Performance - Revenue growth was driven by improvements in wholesale and strength in core sports categories such as running, training, and basketball, with North America revenue increasing by 4% [4] - Despite the revenue growth, the company faced challenges with gross margin, which fell by 320 basis points to 42.2% due to discounting, channel mix, and increased product costs, including an estimated $1.5 billion in annualized costs from new tariffs [5] Geographic Performance - The recovery in revenue is uneven across regions, with Greater China experiencing a 10% year-over-year decline in revenue, although there are signs of improvement in wholesale order books for spring [6] - Nike anticipates a low-single-digit revenue decline in Q2 as it focuses on demand creation and channel rebalancing [6] Management Commentary - Nike's CEO, Elliott Hill, acknowledged that while progress may not be linear, the overall direction is positive [7] - The company is navigating significant challenges, including competitive intensity and margin pressures, which may affect investment attractiveness [2][8]