Nike's wholesale pivot paid off in a $11.72B quarter that beat its own guidance

What was changed

Nike’s fiscal 2026 first-quarter results, reported on 30 September 2025, beat Wall Street and, more importantly, the company’s own guidance. Revenue rose 1% year over year to $11.72 billion against expectations of about $11 billion, and EPS of 49 cents (down 30% from a year earlier) beat the 27-cent consensus. Management had forecast revenue falling by a mid-single-digit percentage and SG&A rising; instead revenue grew and SG&A dollars dipped about 1%. The stock climbed more than 4% to around $72.66 in extended trading.

The quarter was read as validation of CEO Elliott Hill’s turnaround. Hill, who returned as CEO in October 2024 after the direct-to-consumer emphasis of predecessor John Donahoe, refocused Nike on its most important categories across three geographies and five major cities through the ‘Win Now’ initiative, and pivoted back to retail partners like Dick’s Sporting Goods and Foot Locker. The ‘sport offense’ brought the organization closer to athletes, and Hill told the earnings call that ‘Nike running grew over 20% this quarter.’

The wholesale re-engagement showed in the numbers: North America wholesale returned to growth, up 5% currency-neutral. Nike also returned to selling wholesale on Amazon in 2025 for the first time since 2019, with Hill saying the Nike Brand Store there drove stronger engagement and sales than anticipated. Nike still guided Q2 revenue down low-single digits, with a 175-basis-point tariff hit inside a 300-to-375 basis point margin decline; the annualized gross tariff cost is now estimated at $1.5 billion, up from $1 billion, to be mitigated by sourcing shifts and fall price increases.

Why it worked

Nike had over-indexed on its direct-to-consumer channel under its previous CEO, weakening relationships with the wholesale partners that still drove volume.

The 'Win Now' initiative concentrated resources on the best-performing categories, led by running, instead of spreading investment evenly across the portfolio.

Management rebuilt credibility by guiding conservatively and beating its own numbers — revenue, margin and SG&A all came in better than the guidance given three months earlier.

Tariffs were absorbed through sourcing optimization, reduced China footwear imports and fall price increases rather than left to compress margins unchecked.

What can be applied

Reversing a channel strategy shows up first in one clean quarter: pick the categories and partners you abandoned, then beat your own guidance where you said you would fix things.

Aftermath

CFO Matthew Friend cautioned that 'progress won't be linear and there is still work to do', with Greater China and Converse still to return to profitable growth. Nike guided Q2 revenue down low-single digits, but said its spring order book was up year over year and that wholesale should return to modest growth for the full fiscal year.