Nike's 'Win Now' Strategy Shows Early Wins, But Q2 Earnings Expected To Slip

As Nike Inc. (NYSE:NKE) prepares to report second-quarter fiscal 2026 earnings on Dec. 18, CEO Elliott Hill has cautioned that the “journey back to greatness” will not be linear, a sentiment reflecting the mixed reality facing investors.

While Nike's “Win Now” strategy is sparking life in key categories, second-quarter financials are expected to dip as the company battles significant headwinds.

Check out NKE’s stock price here.

The ‘Win Now’ Pivot

Nike's ‘Win Now’ strategy—a prioritized focus on Running, North America, and Wholesale—is showing early “proof points”. The Running category surged over 20% in the first quarter, driven by revamped franchises like the Pegasus and Vomero.

Furthermore, the company's spring wholesale order book is up, signaling that retail partners are regaining confidence in the brand.

However, this pivot comes at a cost. Management has intentionally reduced the supply of classic franchises like the Air Force 1 and Dunk to preserve brand health, a move that drags on immediate revenue. Consequently, organic digital traffic has slowed by double-digits as promotional activity is reined in.

Headwinds: Tariffs and China

Despite the strategic progress, the financial picture for the second quarter remains challenged. Management has guided second-quarter revenue to be down in the low single digits and expects gross margins to contract significantly, by 300 to 375 basis points.

This pressure is driven largely by the tariffs, which are projected to cost the company $1.5 billion annually, alongside continued weakness in Greater China, where revenue fell 10% last quarter.

See Also: Nike Stock Jumps On Q1 Earnings Beat: ‘We Still Have Work Ahead’

Analysts Seek A ‘Clearer Inflection’

Wall Street remains cautious. While acknowledging the potential for a beat against conservative guidance, analysts at Raymond James argue that a stock re-rating is unlikely until there is a “clearer revenue and EBIT% inflection”.

Similarly, Stifel maintains a ‘Hold’ rating, noting that with shares trading at a premium ~25x FY27 earnings, the market has already priced in a recovery that has yet to fully materialize. Investors will be watching closely to see if the “Win Now” momentum can eventually outpace the macro headwinds.

NKE Underperforms In 2025

NKE shares fell 0.97% to $67.12 apiece on Tuesday. However, it was up by 8.43% over the last six months. Year-to-date, the stock has declined by 11.3%.

It maintains a weaker price trend over the medium and long term but a strong trend in the short term, with a poor quality ranking. Additional performance details, as per Benzinga's Edge Stock Rankings, are available here.

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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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