Nike Inc. appears to be running in the right direction as it makes progress on a turnaround.

Wall Street already knows that first quarter sales will likely be pressured by higher tariffs, fewer promotions and uncertain consumer spending. What market watchers want to assess when the company reports earnings results on Tuesday is how much more progress has it made on its turnaround strategy. So far, the early read has been positive.

“US retailers’ comments on Nike’s new running products, the expansion of Jordan and Nike at wholesale accounts, and consumer spending during back-to-school have been positive,” noted Telsey Advisory Group analyst Cristina Fernández. She expects first quarter sales to be pressured by lower traffic online due to fewer promotions, unit reductions to key franchisees and ongoing softness in China.

The Telsey analyst said Nike is making the right moves by cleaning up its inventory, increasing newness, and strengthening relationships with wholesale partners. She’ll be focused on what Nike says about product innovation and how the running footwear footwear assortment is performing, what are the next categories to be revitalized, and the expectations for the NikeSkims brand that was launched last Friday, as well as wholesale distribution. Fernández said that while Nike had estimated $1 billion in tariff impact on Fiscal Year 2026 earnings, with tariffs on countries such as Vietnam, Cambodia and Indonesia doubling since then, the new estimate could be closer to the $1.5 billion range. She expects that the brand will need a few more quarters before there can be some stabilization.

CFRA Research analyst Zachary Warring said Nike is “well insulated from tariffs” as only 44 percent of Nike brand revenues were from North America in Fiscal Year 2025 and just 15 percent of goods are manufactured in China, the country that he says “will end up with the highest tariff rate.”

“As the largest footwear and apparel brand, it also has the most power over its suppliers. We believe the turnaround is in full swing,” the CFRA analyst said, adding that the new strategy to focus on sports “will bear fruit.” And he expects the company to beat estimates since analyst expectations have been lowered.

Jefferies analyst Randal Konik expects a “modest beat,” with a “sharp” second half acceleration due to easy year-ago comparisons. “Innovation, retail momentum, and a cleaner marketplace support our bullish stance,” Konik said.

While Konik expects revenues to be down, he also said there should be “strong traction from new product.” In addition, Nike foot traffic returned to positive growth in August, up 1.3 percent. “U.S. purchase consideration also move higher, with the index we track showing a 3 percent increase for Nike and 6 percent [uptick] for Jordan, signaling strengthening consumer interest,” the analyst noted.

Among the newer products, The Vomero 18 has surpassed $100 million, the Pegasus continues to lead in average monthly search volume, and the NikeSkims apparel collaboration may further drive interest among female customers, the analyst said. He also noted that retailers are “leaning into” the Nike brand, adding that broad distribution and fresh product innovation are driving stronger engagement, which is evidenced by Nike’s year-over-year increase in its holiday order book.

Following Nike’s fourth quarter earnings report in June, Footwear News learned from specialty retailers that the Nike Running comeback is very much on. And Nike has been prolific with new style introductions. The new women’s sneaker Astra Ultra, which surfaced in June, featured shapes and patterns created by generative AI.

For the fall, the retro running shoe Air Max 95 will feature a combination of camouflage and bright orange as part of the sneaker’s 30th anniversary celebration. In addition, Nike’s Air Foamposite Pro classic Pearl colorway will be reissued over the holiday for its Nike Vaporposite Pro, a football-ready version of the shoe featuring a cleated plate on the bottom. Further out, the Nike Air Max Phenomena SWDC (Serena Williams Design Crew) sneaker loafer featuring a Pearl Pink/Black/Cool Gray colorway is slated for next year.