Nike Inc (NYSE:NKE) shares are trading higher on Wednesday after the company reported better-than-expected financial results for the first quarter.
What To Know: Nike beat analyst estimates on the top and bottom lines in the first quarter, reporting revenue of $11.72 billion versus estimates of $11 billion, and earnings per share of 49 cents versus estimates of 27 cents.
Total revenue in the first quarter was up 1% year-over-year as Brand revenues increased 2% and Wholesale revenues increased 7%, but Nike Direct revenues fell 4%.
Nike also saw strength in all geographic locations except for China. North America sales were up 4%, Europe sales were up 6%, Asia Pacific sales climbed 2% and Greater China sales fell 9% year-over-year.
“I’m encouraged by the momentum we generated in the quarter, but progress will not be linear as dimensions of our business recover on different timelines,” said Matthew Friend, executive vice president and CFO of Nike.
Nike ended the first quarter with $8.1 billion of total inventories and $8.6 billion in cash, cash equivalents and short-term investments.
On the earnings call following the company’s quarterly results, Nike said it expects holiday quarter revenue to be down in the low single digit percentage range, which is in line with analyst expectations, per CNBC. Guidance includes a 1% positive impact from exchange rates.
Nike also said it expects tariffs to cost the company $1.5 billion in fiscal 2026 and negatively impact gross margin by approximately 1.2%. Despite the tariff headwinds, the company said it’s seeing strong engagement in its return to selling on Amazon.
Following the print, Needham analyst Tom Nikic reiterated Nike with a Buy rating and maintained a price target of $78. Telsey Advisory Group analyst Cristina Fernandez maintained a Market Perform rating and price target of $75.
NKE Price Action: Nike shares were up 5.33% at $73.45 at the time of publication on Wednesday, according to Benzinga Pro.
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