NIKE, Inc. recently released its 10-Q for the first quarter of fiscal 2026, providing a comprehensive look at its financial performance and operational highlights. The report reveals a mixed picture for the sportswear giant.
Financial Highlights: Revenues for the first quarter of fiscal 2026 were $11.7 billion, a marginal increase from $11.6 billion for the first quarter of fiscal 2025. NIKE Direct revenues were $4.5 billion for the first quarter of fiscal 2026, down from $4.7 billion for the first quarter of fiscal 2025, primarily due to a decrease in traffic in NIKE Brand Digital. NIKE Brand wholesale revenues were $6.8 billion for the first quarter of fiscal 2026, up from $6.4 billion for the first quarter of fiscal 2025, driven by an increase in units, partially offset by an increase in discounts. Gross margin for the first quarter of fiscal 2026 decreased 320 basis points to 42.2% due to higher discounts with wholesale partners, higher discounts in NIKE Brand factory stores, and an increase in product costs including new tariffs and changes in channel mix. Inventories as of August 31, 2025, were $8.1 billion, an 8% increase compared to May 31, 2025, primarily driven by product mix and an increase in units. NIKE returned approximately $0.7 billion to shareholders in the first quarter of fiscal 2026 through dividends and share repurchases.
Factors Impacting Business: NIKE is navigating through external factors such as geopolitical dynamics, tax regulation, fluctuating foreign currency exchange rates, and evolving tariff policies, which create uncertainty and volatility in the operating environment. The company expects a gross incremental cost of approximately $1.5 billion on an annualized basis due to new tariffs, which is projected to have a negative impact on gross margin for fiscal 2026.
Operational Actions: NIKE is focused on driving distinction within key sports, building a complete product portfolio, creating stories to emotionally connect with consumers, and elevating and growing the entire marketplace. The company is taking actions in product, marketplace, and brand management to reignite brand momentum and reposition its business to drive long-term shareholder value.
Financial Metrics: Earnings Before Interest and Taxes (EBIT) for the first quarter of fiscal 2026 was $904 million, down from $1,264 million for the first quarter of fiscal 2025. The EBIT margin was 7.7% for the first quarter of fiscal 2026, down from 10.9% for the first quarter of fiscal 2025. * Currency-neutral revenues, which exclude the impact of foreign currency exchange rate fluctuations, decreased by 1% for the first quarter of fiscal 2026.
As a result of these announcements, the company's shares have moved 0.19% on the market, and are now trading at a price of $74.34. If you want to know more, read the company's complete 10-Q report here.
