3 Key Takeaways From Nike's Earnings. Is This a Buying Opportunity?

Core Insights - Nike reported a 1% increase in revenue for fiscal Q1 2026, reaching $11.7 billion, but this growth masks underlying challenges, with a 1% decline on a currency-neutral basis [2][5] - The divergence between Nike's Direct and Wholesale channels indicates a shift in strategy, with Direct sales declining by 4% while Wholesale grew by 7% [3][5] - Regional performance varied, with North America showing strength, particularly in apparel, while Greater China faced significant declines, particularly in footwear and equipment [4][5] Financial Performance - Nike's net income fell by 31%, with diluted EPS dropping from $0.70 to $0.49, reflecting a 30% decline [9] - Gross margin contracted by 320 basis points to 42.2%, impacted by increased discounting, unfavorable channel mix, and tariff pressures [9] - Operating expenses remained stable, with a slight decrease in selling and administrative costs, but were insufficient to counteract margin declines [9]