“We highlighted last quarter that it will take more time to return to healthy growth in Greater China and Converse. And we expect headwinds to continue for the balance of the fiscal year.”

In context

“ess is in a better position. Sport dimensions represent a larger mix of the portfolio. Led by running, and we are seeing momentum build in other sports. The classics footwear franchises are on track to decline from peak levels by more than $4 billion by fiscal year-end. Wholesale has returned to growth. With a growing order book globally in both spring and summer. NIKE digital has reduced promotional activity and is operating more strategically in sync with our partners. And inventory is in a healthy and clean position in North America and EMEA. While we are encouraged by all of this, as we have said, our progress will not be linear. As each brand, sport, and geography is on a different timeline. And we continue to read and react every day in service of the long-term health of our brands. We highlighted last quarter that it will take more time to return to healthy growth in Greater China and Converse. And we expect headwinds to continue for the balance of the fiscal year. There are also puts and takes across EMEA and APLA. Meanwhile, North America and running stand out again this quarter. And we are growing more confident in our ability to sustain the momentum as we look forward. Being in the middle innings, as Elliott referenced, also means it will take time for the actions we have put into place to change the trajectory on EBIT margins. We have been navigating transitory headwinds to margin due to our WinNow actions. And shifts in the business. Including product and channel mix, and continued inventory liquidation. As we highlighted last quarter, we are also navigating new structural headwinds from the $1.5 billion of annualized incremental product costs due to higher US tariffs. This represents a gross headwind of approximately 320 basis points to gross”