NIKE Misses Revenue Mark Despite Beating Earnings Expectations

NIKE's Q1 earnings report beat analyst expectations on improved gross margin and disciplined expense management, but revenue fell short of projections.

The company reported a net income of $48 cents per share, down 2% from the same period last year. Revenues dropped 4.3% to $11.2 billion, missing the Zacks Consensus Estimate of $11.4 billion by 1.6%.

NIKE's performance grew in the high single digits, but weakness in Sportswear and Jordan Brand held back revenue growth. The company's Channel Mix remained under pressure, with NIKE Brand revenues down 4% to $10.95 billion.

Gross margin expanded by 60 basis points year over year to 42.8%, driven by lower warehousing and logistics costs. Management cited supply-chain cost actions and foreign-exchange tailwinds as contributing factors.

NIKE plans to generate about $2.5 billion in cumulative savings through its Pace operating-model transformation, which aims to scale the Sport Offense, modernize the supply chain, and streamline operations.