Nike Beats Profit Estimates with Strong Wholesale Sales Despite Digital Weakness

Nike Inc. reported quarterly earnings that surpassed Wall Street expectations, driven by stronger wholesale demand, which sent its shares up 3% in after-hours trading. The athletic giant posted first-quarter earnings of 49 cents per share, significantly higher than analysts’ projections of 27 cents. Revenue increased 1% to $11.7 billion, broadly in line with market forecasts.

The company’s wholesale business surged 7% to $6.8 billion, as retailers stocked up ahead of major sports releases. In contrast, Nike Direct sales, which include both online and branded stores, slipped 4%, reflecting softer digital demand. Sales in the core Nike brand rose 2%, supported by growth in North America, though results in Greater China lagged. Converse sales plunged 27%, underscoring ongoing challenges in secondary brands.

Despite top-line growth, profitability was pressured. Nike’s gross margin fell 320 basis points to 42.2%, weighed down by heavier discounts and higher tariffs. Net income dropped 31% to $700 million. The company highlighted that disciplined cost management remains a priority amid external headwinds.

CEO Elliott Hill emphasized that Nike is making progress through its “Win Now” strategy, prioritizing growth in North America, Wholesale, and Running categories. However, he acknowledged uneven recovery across markets and product segments. CFO Matthew Friend cautioned that external challenges will continue to impact results but reaffirmed the company’s commitment to maintaining cost discipline.

Nike’s quarterly update reflects a mixed performance—robust wholesale momentum offset by digital weakness and margin pressures. As the company adapts to shifting consumer behavior and macroeconomic headwinds, its ability to balance wholesale strength with direct-to-consumer growth will remain a key factor in sustaining long-term profitability.