“We expect Q2 gross margins to be down approximately 150 basis points, with higher promotions, channel mix headwinds, and supply chain deleverage more than offsetting lower product costs and a decreasing benefit from strategic pricing actions.”

In context

“social buzz with storytelling around NIKE athlete, Zheng Qinwen, who took home gold as China's first Olympic Tennis champion. Jordan's first athlete tour in China since the pandemic was also a big success as Luka, Tatum, Paolo, and Zion connected with young fans in Shanghai and Beijing. Top innovation and sport performance continues to resonate. This quarter's standouts included Peg 41, Alphafly and Sabrina 2. In addition, consumer response to our latest Protro release proved that Kobe remains one of the most beloved athletes in China. While our outlook for the near term has moderated, we remain optimistic about the long-term opportunities for sport and for NIKE in China. Now let me provide specific guidance for the second quarter. We expect Q2 revenues to be down in the 8% to 10% range. We expect Q2 gross margins to be down approximately 150 basis points, with higher promotions, channel mix headwinds, and supply chain deleverage more than offsetting lower product costs and a decreasing benefit from strategic pricing actions. We expect SG&A to be roughly flat versus the prior year, with increased demand creation investment largely offset by tighter operating overhead. We expect other income and expense, including net interest income to be $30 million to $40 million, reflecting lower interest rates. And we expect our effective tax rate to be in the high-teens range. Although, we will not be providing full year guidance for the remainder of this fiscal year, we do want to provide additional color to help you understand our latest read of NIKE's business trajectory, as we see it today prior to our leadership transition. Looking forward, our revenue expectations have moderated since the start of the year, given traffic trends on NIKE Digital, retail sales trends across the marketplace, and final order books for sp”