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Nike Q1 FY2026 earnings preview: turnaround strategy faces crucial test
The sportswear giant reports on 30 September with investors watching for signs that the "Win Now" strategy is moderating revenue declines and margin pressures.
When is Nike reporting?
Nike enters its first quarter (Q1) fiscal year (FY) 2026 report due out 1 October 2025 at 6.15am AEST under intense scrutiny.
Key financials
Results from the previous quarter
In its most recent quarter, the athletic apparel giant delivered revenue of around $11.1 billion, down about 12% year-over-year (YoY), with net income plunging even more sharply.
Although its earnings per share (EPS) of $0.14 beat expectations, the topline decline and margin pressure have left many investors on edge about the company's trajectory.
Q1 2026 expectations
Nike is expected to see a slight fall in revenue but a sharp drop in pre-tax profit:
- Revenue: $11 billion, representing a 5% YoY decrease
- Pre-tax profit: $492 million, down 62% YoY
- Earnings per share (EPS): $0.27, down 61% from $0.70 in the same period last year
Management has pegged this quarter as the worst hit from its 'Win Now' strategy designed to streamline operations, sharpen focus on sport performance, boost innovation, and reposition supply and distribution channels.
This strategic transformation represents one of the most significant shifts in Nike's recent history, with investors closely monitoring whether the painful restructuring will deliver the promised benefits.
Modest improvement expected but recovery remains distant
Looking ahead, analysts expect Nike to show some improvement but not a full recovery. If achieved, this would suggest that Nike's turnaround actions are starting to moderate the worst of its top-line erosion and provide evidence that the strategic pivot is gaining traction.
However, the continued expectation of revenue decline indicates that Nike's challenges are far from resolved, with the company still working through inventory issues and competitive pressures.
The pace of improvement will be crucial for investor confidence as markets seek evidence that the worst of the restructuring impact is behind the company.
Regional and channel performance under focus
Key areas to watch include performance in Greater China and Nike's digital channel, both of which have underperformed in recent quarters and represent significant portions of the overall business.
China remains Nike's largest international market, making its performance crucial for overall growth prospects and demonstrating the brand's resilience in competitive markets.
Digital channel performance has become increasingly important as Nike has invested heavily in direct-to-consumer capabilities and reduced reliance on wholesale partnerships.
Any signs of stabilisation or improvement in these key areas could provide positive catalysts for investor sentiment and share price performance.
Tariff pressures create additional headwinds
Tariffs represent another significant headwind for Nike's profitability. New United States (US) tariffs could cost Nike around $1 billion and the degree to which Nike can shift production away from China in response will be crucial for managing these cost pressures.
The company's heavy reliance on Asian manufacturing makes it particularly vulnerable to trade policy changes that can quickly affect input costs and supply chain logistics.
Nike's ability to diversify its manufacturing base while maintaining quality and cost competitiveness will be a key factor in mitigating tariff impact over the medium term.
Supply chain flexibility and alternative sourcing strategies will become increasingly important for managing both cost pressures and geopolitical risks.
Margin pressures test operational discipline
On the margin side, gross margins are likely to remain under pressure owing to higher discounting, inventory obsolescence, and cost inflation, although improvements in sourcing, logistics, and product mix could provide relief.
The company's inventory management and pricing discipline will be crucial for maintaining profitability while working through the strategic transformation and market challenges.
Cost inflation across multiple areas, from raw materials to labour and logistics, creates ongoing pressure that requires operational excellence to offset.
Product mix improvements, focusing on higher-margin performance products versus lifestyle items, could help support margin recovery if successfully executed.
Binary outcomes likely from earnings reaction
If the company delivers modestly better revenue performance, reassures on mitigating tariff exposure, and shows evidence of cost discipline, the results may help rebuild investor confidence in the turnaround strategy.
Otherwise, further declines or weak guidance could drag the stock lower as investors lose patience with the transformation timeline and execution challenges.
The high expectations already embedded in analyst forecasts mean that even modest disappointments could trigger significant share price volatility around the earnings announcement.
According to London Stock Exchange Group (LSEG) Data & Analytics, most analysts rate Nike as a 'buy' or 'hold' with only two having a 'sell' recommendation. The mean long-term share price target sits around $80 approximately 13% above the current share price (as of 22 September 2025).
Nike LSEG Data & Analytics chart
TipRanks has a Smart Score of ‘8 outperform’ and a ‘buy’ rating for Nike.
Nike TipRanks Smart Score chart
Nike's share price, down around 6% year-to-date, has historically been sensitive to guidance changes, making forward-looking commentary particularly important for market reaction.
Nike share price technical analysis
The Nike share price has twice been rejected by the psychological $80 region - once in July and once in August – and has been drifting lower over the past month.
The 200-day simple moving average (SMA) and 27 June gap low at $70.21 - $69.69 may offer support, but, if fallen through, may lead to another down leg at least partially closing the late June $69.69 - $62.73 gap. The mid-June peak at $64.85 represents a possible downside target for this scenario.
As long as the $70.21 - $69.69 support zone holds on a daily chart closing basis, the Nike share price may bounce back and revisit its 55-day SMA and last week’s high at $75.07 - $75.53. This resistance area would need to be exceeded on a daily chart closing basis for the bulls to take the Nike share price back towards the $80 region.
Nike daily candlestick chart
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