Nike’s first quarter under CEO Elliott Hill showed mixed signals: modest revenue growth but a sharp drop in profits and margins. North America and EMEA are gaining momentum, with strong running and basketball sales, while Greater China and digital remain under pressure. Tariff impacts are rising to $1.5 billion, and Converse revenues are down 27 percent.

nike-shox-z-aryna-sabalenka-1

Source: Nike

Nike athlete Aryna Sabalenka features in the first campaign for the Shox Z, an elevated sportswear silhouette.


Nike’s “journey back to greatness has only just begun,” CEO Elliott Hill told analysts as the company reported some progress in its turnaround despite weak Q1 2025 results. The North American market and EMEA are making strides. Still, there is much more work and effort needed to improve the group’s flagging Greater China, digital and sportswear segments.

Hill stressed that, given Nike’s size and its three brands (Nike, Jordan and Converse), which serve nearly 190 countries, not all sports channels, countries or businesses will recover on the same timeline. Additionally, the company needs to address ways to mitigate an estimated $1.5 billion in tariff impacts, some 50 percent more than the $1 billion it projected last quarter.

CEO Hill: ‘We are far from our ultimate goal’

“While our North America teams are setting the tone [for a complete recovery],” Hill said, “we’re still far from our ultimate goal of elevating an integrated marketplace, digital and physical, wholesale and Nike Direct in all geographies.”

Nike’s net income tumbled 31 percent to $727 million from $1,051 million in Q1, ended Aug. 31, as total revenues inched up by 1 percent to $11.72 billion, and implied operating income fell by 23 percent to $927 million from $1,209 million. Gross margin sank by 320 basis points to 42.2 percent from 45.4 percent, as the company worked to clean up its inventory, which fell by 2 percent year-over-year to $8,114 million.

Nike - Income
Q1, ended Aug. 31 ($ million)
  2025 2024 Change
Revenues 11,720 11,589 1.1%
Cost of sales 6,777 6,332 7.0%
Gross profit 4,943 5,257 -6.0%
SG&A expenses 4,016 4,048 -0.8%
Interest expense, net -18 -43 58.1%
Other expense, net 23 -55 –
Pre-tax 922 1,307 -29.5%
Tax 195 256 -23.8%
Net income 727 1,051 -30.8%
Diluted EPS 0.49 0.70 -30.0%
Source: Nike Inc.

Under Hill’s direction, Nike has realigned its business teams by sport, rather than by sex and age (men, women and children), as it refocuses on product innovation and storytelling in key segments such as running, basketball, global footwear and sportswear. Meanwhile, new leadership has been installed at Converse, where Q1 revenues fell by 27 percent to $366 million.

The video showcases Nike’s widely discussed brand campaign, “Why Do It.”

Regional results led by North America, EMEA

The company’s home market generated a 4 percent gain in Q1 revenues to $5,020 million as the region’s Ebitda slipped by 7 percent to $1,134 million. Wholesale revenues gained 4 percent, benefitting from shipment timing in the year-ago period and higher liquidations in value channels. Footwear sales were flat at $3,219 million, but apparel revenues improved by 11 percent to $1,474 million. Running sales grew by more than 20 percent, as Nike reset 1,300 retail spaces for the segment. Training and basketball sales, meanwhile, rose by double-digits, as revenues from the brand’s classic footwear franchises tumbled by 30 percent.

In the EMEA, total sales rose by 6 percent on a constant-currency basis to $3,331 million, with apparel sales increasing by 11 percent to $1,106 million and footwear sales stepping up by 4 percent to $2,021 million. Ebitda was down 7 percent year-over-year at $735 million. Making strides both in sport and with its wholesale partners, Nike says the region is the furthest ahead in repositioning Nike Digital to a full-price business, despite soft traffic and demand. Faced with increased promotional activity over the last 90 days in key countries, the group has selectively leveraged additional discounts within its digital business.

Nike - Revenues
Q1, ended Aug. 31 ($ million)
  2025 2024 Change
North America      
  Footwear 3,219 3,212 0.2%
  Apparel 1,474 1,331 10.7%
  Equipment 327 283 15.5%
  Total 5,020 4,826 4.0%
EMEA      
  Footwear 2,021 1,952 3.5%
  Apparel 1,106 993 11.4%
  Equipment 204 198 3.0%
  Total 3,331 3,143 6.0%
Greater China      
  Footwear 1,109 1,246 -11.0%
  Apparel 362 360 0.6%
  Equipment 41 60 -31.7%
  Total 1,512 1,666 -9.2%
Asia-Pacific & Latin America      
  Footwear 1,061 1,052 0.9%
  Apparel 371 348 6.6%
  Equipment 58 62 -6.5%
  Total 1,490 1,462 1.9%
Global Brand Divisions 9 14 -35.7%
Total Nike Brand 11,362 11,111 2.3%
Converse 366 501 -26.9%
Corporate -8 -23 65.2%
Total Nike Inc. 11,720 11,589 1.1%
Total Nike Brand      
  Footwear 7,410 7,462 -0.7%
  Apparel 3,313 3,032 9.3%
  Equipment 630 603 4.5%
  Global Brand Divisions 9 14 -35.7%
Total Nike Brand 11,362 11,111 2.3%
Source: Nike Inc.

Greater China recovery takes time

Greater China’s recovery for Nike is projected to take more time because of “unique marketplace dynamics” and key structural changes. In Q1, the region suffered a 9 percent drop in total revenues to $1,512 million, as its footwear sales dropped by 11 percent to $1,109 million. The region is expected to suffer from revenue and gross margin headwinds throughout FY26, as Nike prioritizes seasonal sell-throughs by refreshing store concepts around sport, creating greater brand distinction at retail with its 5,000-plus monobrand doors, and by reducing aged inventory.

Nike has made a strategic decision to become less reliant on classic franchises in the channel and reduce the quantity and level of promotions for the long-term health of its brands and marketplace across all geographies. But in doing so, the company has seen organic traffic decline. The ongoing strategy for the segment is to find the right assortment and marketing mix to bring more consumers back into the channel. 

→ Adidas confirms guidance as Q2 sales fall short

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