Nike Bounces Back With 1% Revenue Growth Despite Tariff Headwinds
Nike has reported a 1% year-over-year increase in revenue to $11.7 billion in the first quarter of its fiscal year, surpassing analysts' predictions. The sportswear giant is bouncing back from previous challenges, but faces headwinds from US tariffs.
Nike's turnaround is credited to Elliott Hill, an experienced manager who was brought out of retirement to steer the company through its transformation. Hill led the revision of key running shoe models and achieved a significant 20% increase in sales for this category.
The company is grappling with the impact of US tariffs on its supply chain. Nike anticipates a $1.5 billion hit for the current fiscal year, up from the previously forecast $1 billion. Many of Nike's sportswear products are manufactured in Asia, making them susceptible to tariff-related costs.
Nike's net income took a hit, decreasing by 31% to $727 million in the first quarter. This decline reflects the company's previous focus on direct sales and a shift towards fashion items, which led to a self-inflicted crisis.
Nike's revenue growth signals a recovery, driven by strategic changes led by Elliott Hill. However, the company continues to navigate challenges posed by US tariffs, which are expected to impact its bottom line significantly.
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