Nike Q1 revenue beats estimates as wholesale segment thrives

Overview

• Nike fiscal Q1 revenue rises 1% to $11.7 bln, beating analyst expectations, per LSEG data

• Net income for Q1 declines 31% but beats analyst estimates, per LSEG data

• Gross margin decreases 320 basis points to 42.2% due to lower prices, higher tariffs

Outlook

• Company cites dynamic operating environment impacting future recovery timelines

Result Drivers

• WHOLESALE GROWTH - Wholesale revenues rose 7% on a reported basis, driven by strong performance in North America

• DIGITAL DECLINE - NIKE Direct revenues fell 4% due to a 12% drop in digital sales

• GROSS MARGIN PRESSURE - Gross margin fell 320 basis points due to lower average selling prices and higher tariffs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 20 "strong buy" or "buy", 17 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the footwear peer group is "buy"

• Wall Street's median 12-month price target for Nike Inc is $78.00, about 10.8% above its September 29 closing price of $69.55

• The stock recently traded at 36 times the next 12-month earnings vs. a P/E of 31 three months ago

Press Release: ID:nBw3Tf51ha