“we now expect the net headwind in fiscal 2026 to increase from approximately 75 basis points to 120 basis points to gross margin.”

In context

“vide an update on tariffs. Last quarter, I shared that the newly issued tariffs represented a meaningful cost headwind for NIKE. Since the new reciprocal tariffs are stacked on top of the mid-teens rate NIKE already paid on imports. And I also outlined the actions we are taking in response. Balancing impact on the consumer, our partners, our win-now actions, as well as the long-term positioning of our brands in the marketplace. Since our last earnings call, new reciprocal tariff rates have been increased for certain countries. And so with the new rates in effect today, we now estimate the gross incremental cost to NIKE on an annualized basis to be approximately $1.5 billion, up from the $1 billion we shared ninety days ago. Given the magnitude and timing of the most recent rate increases, we now expect the net headwind in fiscal 2026 to increase from approximately 75 basis points to 120 basis points to gross margin. We continue to evaluate and implement the actions I described last quarter to mitigate these new costs over time. We are monitoring developments closely, and I remain confident in our ability to leverage our strengths, our scale, and the deep experience of our leadership team to navigate through this disruption. Now I will turn to our second-quarter guidance. As Elliott said, we are operating in a dynamic environment, both for consumers and our global business. We remain focused on what we can control, principally to make forward progress on our win-now actions for the long-term health of our brands and to activate our sport offense. Our outlook reflects our best assessment of these factors based on the data that we have available today. We expect Q2 revenues to be down low single digits,”