Can NIKE Stay Ahead as Global Sportswear Faces Tariff Headwinds?

NIKE Inc. NKE enters fiscal 2026 confronting a sportswear landscape shaped by slowing consumer demand and escalating tariff pressures, yet its latest quarter shows a company determined to reassert leadership. Management reiterated that the brand’s turnaround is underway, supported by its “Win Now” playbook and the broader structural shift to its new Sport Offense organizational model.Early wins in running, up more than 20% year over year in first-quarter fiscal 2026, and strengthening wholesale momentum highlight that consumers still respond when NIKE aligns innovation, storytelling and marketplace execution. However, the company acknowledges that the recovery remains uneven across segments, with Sportswear softness, digital traffic declines and persistent weakness in Greater China tempering broader progress.Still, tariffs represent the most acute near-term threat to margins. The newly implemented reciprocal tariffs now carry an estimated $1.5 billion in annualized costs, up from prior expectations, translating into a 120-basis-point (bps) headwind to the fiscal 2026 gross margin. NIKE is attempting to offset these pressures through supply-chain efficiencies, pricing mix, and marketplace rationalization.However, management stressed that the tariff impact will weigh heavily until mitigation plans fully phase in. This creates a challenging backdrop for a business already navigating higher product costs, channel mix headwinds and selective discounting to stay aligned with partners. Even with inventory improving across regions, NIKE Digital’s pullback in promotions continues to reduce traffic and near-term revenue visibility.Despite these headwinds, NIKE remains convinced it can regain long-term momentum by focusing aggressively on sport-led innovation. Management emphasized an expanding pipeline across running, global football, basketball and emerging lifestyle-sport hybrids, supported by a more tightly integrated wholesale and direct marketplace strategy.Wholesale partners have increased their spring order books, reflecting rising confidence in NIKE’s product direction. While tariffs and uneven regional recovery may cap near-term upside, the company’s renewed discipline around product creation, brand storytelling and marketplace elevation positions NIKE to stay competitive and eventually accelerate, once macro and policy pressures stabilize.How NKE’s Peers SHOO & WWW Are Coping With TariffsWith mounting tariff pressures, peers like Steven Madden SHOO and Wolverine Worldwide WWW are navigating challenges by reshaping sourcing strategies, tightening inventories and leaning into higher-margin categories to soften the blow.Steven Madden is navigating tariff-driven volatility with a mix of strategic pricing, diversified sourcing and strong fashion execution. While steep China tariffs cut wholesale orders and pressured margins, demand for core Steve Madden styles, especially boots, remains resilient. Management is mitigating cost inflation through sourcing shifts and selective price hikes, while DTC strength and Kurt Geiger momentum help cushion revenue softness and position SHOO for gradual stabilization.Wolverine faces persistent tariff headwinds that are pressuring costs, margins and sourcing flexibility, but the company is leaning on brand strength, cost discipline and portfolio simplification to stay competitive. Strategic price increases, ongoing supply-chain diversification and tighter inventory management are helping offset elevated landed costs. Although wholesale demand remains choppy, momentum in core franchises and improving operational efficiency position WWW to stabilize through the volatility gradually.NKE’s Price Performance, Valuation & EstimatesShares of NIKE have lost 13.8% in the past three months compared with the industry’s decline of 12.8%. Image Source: Zacks Investment Research From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 31.02X compared with the industry’s average of 27.39X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for NKE’s fiscal 2026 earnings implies a year-over-year decline of 24.1%, while that for fiscal 2027 indicates growth of 54.2%. Earnings estimates for fiscal 2026 have been southbound in the past 30 days. Meanwhile, the consensus estimate for fiscal 2027 has been northbound in the same period. Image Source: Zacks Investment Research NIKE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NIKE, Inc. (NKE): Free Stock Analysis Report Wolverine World Wide, Inc. (WWW): Free Stock Analysis Report Steven Madden, Ltd. (SHOO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks