Nike Inc. started its fiscal 2026 by growing its revenue year over year in Q1, but that growth came amid a continuing decline in digital sales.
The year-over-year revenue growth was the first time for Nike since its fiscal Q3 2024 — five quarters ago. Prior to that, it had gone seven consecutive quarters with year-over-year revenue growth. Nike total revenue increased 1% year over year to reach $11.72 billion. That compares to $11.59 billion the prior year.
“We’re still far from our ultimate goal of elevating an integrated for marketplace, digital and physical, wholesale and Nike Direct in all geographies,” Hill said.
Nike Direct refers to direct-to-consumer sales of its namesake brand, which includes both physical and digital channels. Nike Digital refers only to the brand’s online presence.
“Organic traffic has slowed,” Hill said. “We are working to find the right assortment and marketing mix to consistently bring consumers back to our digital ecosystem.”
Nike is No. 13 in the Top 2000. The database is Digital Commerce 360’s ranking of the largest North American online retailers by their annual ecommerce sales. In the database, Nike is the highest-ranking Apparel & Accessories retailer.
Nike Digital sales in Q1
Wholesale led growth for the retailer, growing 5% in the quarter. Meanwhile, Nike Direct sales decreased 5%. That comes as Nike Digital sales declined 12% year over year in its fiscal Q1 2026.
Friend attributed the changes to:
- Higher wholesale discounts
- Higher discounts in Nike factory stores
- Increased product costs, including new tariffs
“Globally, Nike Digital is still working to find solid ground,” Hill said, as the retailer decided to lessen the promotions it offers as a way to drive full-price sales.
Friend said Nike Digital faces a “significant headwind” in Q2 than the retailer’s overall expected revenue decline in the quarter.
Nike revenue in Q1, by region
In North America, Nike revenue in Q1 grew 4% despite Nike Direct declining 3% and Digital falling 10%. Nike physical-store sales were flat, and wholesale increased 11%.
Friend said Nike Digital made “headway” as it reduced the number of days offering site-wide promotions by more than 50. It also lowered its rate of discounts, leading to an increased share of full-price product sales.
In Europe, the Middle East and Africa (EMEA), Nike revenue increased 1%. Similar to North America, Nike Direct and Digital declined in the region (6% and 13%, respectively) and stores were close to flat, growing 1%. Wholesale increased 4%. Friend said EMEA is the “furthest ahead in repositioning Nike Digital to a full-price business” despite traffic remaining “soft.”
In Asia-Pacific and Latin America (APLA), Nike revenue increased 1%. As was the case in North America and EMEA, Nike Direct and Digital sales both declined in Q1 (6% and 8%, respectively). Physical-store sales also declined in the region, down 5%, while wholesale grew 6%.
Nike revenue in Greater China decreased 10% in Q1 — the only region to see a decline. Sales there declined across the board:
- Nike Direct (down 12%)
- Nike Digital (down 27%)
- Physical stores (down 4%)
- Wholesale (down 9%)
“Digital remains a highly promotional marketplace in Greater China, with consumer shopping moments extending longer on local platforms with deeper discounts,” Friend said.
Friend added that Nike Digital “delivered sequential improvement in markdown rates across all territories.”
How tariffs continue to affect Nike
Friend noted that Nike is facing “a meaningful cost headwind” as new reciprocal tariffs — which the U.S. government announced since the retailer’s previous earnings call — are stacked on top of the mid-teens rate the brand already paid on imports.
With the rates in effect as of Oct. 1, Nike anticipates the gross incremental cost of tariffs on an annualized basis to be about $1.5 billion. That’s up from the $1 billion in costs it anticipated at the end of its last quarter.
Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s last quarter’s article on Nike Digital sales.
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