Nike Beats Expectations in Q1 2026, but China Slowdown and Margin Pressures Temper the Win

Nike posted a cautious but promising rebound in its fiscal Q1 2026 results, with revenue climbing 1 % to $11.72 billion, beating expectations despite ongoing headwinds.  While earnings per share fell to $0.49, they surpassed analyst forecasts amid efforts to trim excess inventory and refocus on core performance categories like running. 

However, the quarter wasn’t without challenges: gross margins shrank 320 basis points to 42.2 %, weighed down by higher discounts, tariff pressures, and a tougher mix of sales channels.  Nike’s direct-to-consumer operations, especially digital, remained soft—declining 4 %—while its wholesale business gained 7 %. 

Geographically, North America delivered a modest 4 % revenue growth, but Greater China continued to struggle, with sales falling around 10 %—marking a fifth straight down quarter for Nike in that key market. 

Leadership sounded both optimistic and cautious. CEO Elliott Hill sees early signs that his “Win Now” turnaround is taking hold—especially through wholesale strength and renewed focus on performance sports—but emphasized that the recovery “won’t be linear.”  The company now expects a low-single-digit revenue dip in Q2, and doesn’t anticipate its direct channel to fully rebound until later in the fiscal year. 

In short: Nike outpaced expectations in Q1 with signs of stabilization, yet still faces a tough road ahead—especially in China, in its DTC business, and under continued tariff pressure.