NIKE confirmed Q4 was the quarter of maximum financial disruption as it implemented the Win Now reset and that headwinds should start to moderate and that trends should improve from its Q126. NIKE’s 1H26 will still be impacted by the reset but the rate of decline should improve through FY26. It is looking for a ‘cleaned up’ marketplace by the end of 1H, though will still be reducing Dunk franchise in 2H. NIKE’s Q1 guidance is for a mid-single digit fall in revenues vs the 12% decline seen in Q4 (-9% in Q3). NIKE Digital revenues are expected to be down double-digit for the whole FY26 as it repositions to full-price model and more premium offer. NIKE expects current tariff rates to be a $1 billion headwind (c75bps hit to FY26 gross margin with 100bps impact to 1Q gross margin). It intends to fully mitigate the costs over time by 1) reducing exposure to China (16% of footwear into US); 2) Partnering with suppliers / retail partners to mitigate these costs; 3) Price increases; and 4) Corporate cost reduction. Encouragingly for Wholesale partners like JD, NIKE commented that its order book for the holiday period was positive. For JD, its 1H is still going to be challenging, with more positivity from 3Q and over Christmas. So delivery of FY26 is going to be more 2H-weighted. It is still unclear when NIKE is going to have a full pipeline of innovation which is large enough in volume to offset the shrinking of its three classic franchises (AF1, Dunk, AJ1). This seems unlikely until JD’s FY27. Undemanding valuation (CY26E PE 6.1x) does not reflect recovery and longer-term growth opportunities. We have updated our forecasts for the FY25 results. No change to PBT with de minimus change to EPS.