American sportswear giant Nike reported better-than-expected results for the first quarter of its fiscal 2025 fiscal year. Despite challenging conditions in key markets and rising tariff pressure, the company managed to post higher-than-expected profit and revenue. Shares of the brand rose 3.4% in extended trading on the news.

According to Reuters, Nike’s revenue rose 1% to $11.72 billion, compared to analysts’ expectations of a decline of $11 billion. Earnings per share came in at 49 cents, significantly above the 27 cents forecast. The gains are attributed to the reduction of excess inventory, the recovery of wholesale sales, and the implementation of the strategy of new CEO Elliott Hill.

Despite the positive signals, the company’s management warns that the recovery is still ongoing. Nike expects significant costs from tariffs — about $1.5 billion this year, compared with previous estimates of $1 billion. Almost all of the brand’s products are made in Southeast Asian countries, including Vietnam, which have been hit by high tariffs since the Trump administration.

China, which in 2025 accounted for 15% of Nike’s global sales, is a particular challenge, but it has been declining for the fifth consecutive quarter. The company is losing market share due to competition from local brands Anta and Li-Ning, as well as the rise of younger competitors On and Hoka (Deckers). To stimulate demand, Nike is actively attracting American sports stars, including LeBron James and Ja Morant.

The new management’s strategy involves returning the focus to key sports — primarily running and basketball. Gill plans to restore consumer trust through innovative products and a return to the brand’s sports roots. At the same time, the company predicts that in the second quarter, revenue could fall by low single digits, which is still a better result compared to previous expectations of a 3.1% decline.

CFO Matthew Friend clarified that it is too early to expect a full recovery in the direct-to-consumer sales business. According to him, North America is recovering faster than China, so the company expects gradual growth in fiscal 2026, primarily due to wholesale deliveries. At the same time, gross margin remained under pressure and fell by 3.2 percentage points to 42.2%.

Thus, Nike showed its first positive results after a long period of inventory problems and pressure from competitors. New challenges await the brand ahead, but investors have already reacted optimistically, seeing the potential in Gill's strategy to return the company to sustainable growth.