Nike Inc. (NYSE:NKE) is navigating a period of sharp contrasts, celebrating a new partnership with Kim Kardashian’s SKIMS while simultaneously bracing for a massive financial blow from escalating U.S. tariffs.
Check out NKE’s stock price here.
Trump’s New Tariffs To Cost Nike $1.5 Billion
During its first-quarter fiscal 2026 earnings call on Tuesday, the shoemaker and sportwear giant revealed that the estimated annual cost of the tariffs has ballooned to $1.5 billion, casting a shadow over early signs of progress in its corporate turnaround.
The financial headwinds from the trade policy are significant, increasing 50% from a $1 billion estimate just 90 days ago.
Chief Financial Officer Matthew Friend told investors the new tariffs represent a major challenge. “We now estimate the gross incremental cost to NIKE on an annualized basis to be approximately $1.5 billion,” Friend stated, adding that the company expects a net headwind of 120 basis points to its gross margin for the fiscal year as a result.
Kim Kardashian Lifts Nike’s Sportswear Portfolio
Despite the tariff pressure, Nike executives highlighted several strategic wins. The company’s new performance training collaboration with SKIMS, which debuted with 58 silhouettes, is already a bright spot.
“The early consumer response was very strong,” said CEO Elliott Hill, who framed the partnership as an opportunity to bring “something unexpected to a new consumer.”
This success is part of Hill’s broader “Win Now” strategy, which is showing positive results in key areas. The company’s Running division surged over 20% in the quarter, and its North American business returned to growth, with revenue climbing 4%.
See Also: Nike Stock Jumps On Q1 Earnings Beat: ‘We Still Have Work Ahead’
Hill’s Turnaround Remains In Progress
However, the turnaround remains a work in progress. Nike’s business in Greater China declined 10%, and its direct-to-consumer digital sales fell 12% as it deliberately pulled back on promotions.
The mixed results underscore the challenge ahead for Hill, who cautioned that the company’s recovery will take time. “The truth is, NIKE’s journey back to greatness has only just begun,” Hill said. “Progress won’t be perfectly linear, but the direction is.”
Nike Q1 Earnings Snapshot
It reported first-quarter revenue of $11.72 billion, beating analyst estimates of $11 billion and earnings of 49 cents per share, beating analyst estimates of 27 cents per share.
For the second quarter, the company anticipates revenue to be down by low single digits, with gross margins expected to decline significantly by 300 to 375 basis points, heavily impacted by new tariffs.
Geographically, North America is poised to lead the recovery, while Greater China and the Converse brand are expected to remain headwinds for the remainder of fiscal 2026.
Price Action
Nike closed 0.26% higher on Tuesday at $69.73 per share, and it was up 4.48% in after-hours. The stock has declined 5.35% on a year-to-date basis and 21.77% over the last year.
Benzinga’s Edge Stock Rankings indicate that NKE maintains a weaker price trend in the short, medium, and long terms, with a moderate growth and value ranking. Additional performance details are available here.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 index and Nasdaq 100 index, respectively, rose on Tuesday. The SPY was up 0.38% at $666.18, while the QQQ rose 0.27% to $600.37, according to Benzinga Pro data.
The futures of the S&P 500, Dow Jones, and Nasdaq 100 indices were lower on Wednesday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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