NIKE Q1 positive surprise with a return to positive sales momentum. Q2 revenue guidance for mid-single digit decline NIKE beat Q1 earnings estimates (reported 49c vs FactSet consensus 27c) with the positive surprise being a return to positive revenue growth. Group revenues increased 1% (FactSet consensus -5%). NIKE brand revenues increased 2% with Direct revenues down -4% (-5% CC) and Wholesale revenues up 7% (+5% CC). Converse revenues were down 27%. A new Converse leadership has been put in. Geographies are at different stages of recovery with North America leading its global recovery, with Greater China furthest behind. EMEA is furthest ahead in repositioning NIKE Digital to a full-price business. In North America, Q1 revenue grew 4%. NIKE Direct declined 3% (Digital down 10% + stores flat), with Wholesale up 11%, partially due to shipment timing last year as well as higher liquidation volume to value channels. In EMEA, Q1 revenue grew 1%. NIKE Direct declined 6% (Digital down -13% and NIKE stores +1%) with Wholesale up 4%. EMEA has largely cleaned the marketplace though promotional activity has increased across the industry. Nike is seeing good success with its Win Now actions which have driven momentum in its immediate priority areas of Running, North America and Wholesale. From September, the company shifted to ‘Sport offensive’ where the organisational structure is now smaller cross-functional teams aligned by brand and sport, by country and channel, wholesale and direct, digital and physical. Management sees this as critical to success and driving growth across its 3 brands – NIKE, Jordan and Converse. Football was reset this quarter ahead of World Cup in 2026, with a good stream of innovation expected. Q2 guidance is for revenues to be down low-single-digits, including 1% benefit from FX. Both Wholesale and NIKE Direct are expected to see a modest headwind as it laps aggressive clearance activity last year. Management updated on tariffs, which is now likely to cost gross $1.5bn (vs £1bn 3 months ago). Key take-aways from JD Sport’s perspective. Marketplace should be in a better position from next calendar year From its reset perspective, NIKE confirmed Q4 was the most disruptive quarter. Momentum should improve from here, though it is early days and the recovery will not be linear. Management does not expect NIKE Direct to return to growth in FY26. It continues to reposition NIKE Digital back to full price, which will eventually help the whole marketplace. Management believes it will exit 1H with a healthy marketplace, though the margin benefits from less inventory clearance will be 2H weighted. NIKE sees momentum building with its Wholesale partners. Its Spring order book is up YOY and it expects Wholesale revenue to return to modest growth for the whole of FY26. Encouragingly, NIKE talked about being more collaborative and building its wholesale partners relationships as it needed to reposition digital alongside its partners and stop competing with them.