Nike, Inc.
NKE · NYSE
Nov 2026
Next quarter
Reports Dec 17, 2026.
Consensus is $0.34 EPS for Nov 2026 across 12 estimates, ranging $0.15 to $0.39.
NKE Aug 2026
- 11.63%
- -3.64%
- $0.43
- $0.48
- —
- $11.21B
Reported results
- $11.21B
- 42.79%
- $712.00M
- $0.48
Highlights
- EPS beat, sales declined: Q1 FY2027 diluted EPS of $0.48 exceeded the $0.43 consensus by 11.6%, while revenue fell 4% year over year to $11.21 billion, or 5% on a currency-neutral basis.
- Performance growth was not enough: NIKE Performance grew high single digits, but Sportswear and Jordan together were a high-single-digit drag on consolidated NIKE, with Greater China also a major headwind.
- China remained the clearest regional weakness: Greater China revenue fell 26% currency-neutral to $1.18 billion and EBIT dropped 34% to $248 million; management expects revenue there to weaken further through the rest of FY2027.
- The outlook reset is significant: NIKE expects FY2027 revenue to decline high single digits and EBIT to fall by a greater percentage than revenue; adjusted EPS guidance is $1.15–$1.35, excluding about $0.15 of Pace restructuring expense.
- Pace targets a lower cost base: The operating-model program is expected to generate about $2.5 billion of cumulative savings through FY2031, against about $1.0 billion of charges, in addition to roughly $0.3 billion of FY2026 severance costs.
- Gross margin improved despite weaker sales: Gross margin rose 60 basis points year over year to 42.8%, mainly on lower warehousing and logistics costs; SG&A fell 3% to $3.91 billion.
- Direct sales fell faster than wholesale: NIKE Direct declined 9% currency-neutral, including a 13% drop in digital and 5% in owned stores, while wholesale decreased 1%.
- Earnings remained below year ago: Net income was $712 million, down 2%, and diluted EPS was $0.48 versus $0.49; versus the latest earlier quarter in the supplied results, Q3 FY2026, revenue was nearly flat while EPS was up from $0.35.
Analysis
Nike’s Q1 FY2027 was an in-line quarter operationally, but the new full-year outlook sharpened the picture of a prolonged reset. Revenue of $11.21 billion declined 4% reported and 5% currency-neutral year over year, while diluted EPS of $0.48 beat the $0.43 consensus by 11.6%. Net income fell 2% to $712 million and EPS slipped from $0.49 a year ago. Against the latest earlier quarter provided, Q3 FY2026, revenue was nearly flat at $11.28 billion and EPS increased from $0.35; Q4 FY2026 was not included in the supplied results.
The defining split was continued momentum in Performance, up high single digits, against weakness in Sportswear, Jordan and Greater China. China revenue declined 26% currency-neutral, while NIKE Direct was down 9%; North America grew 2%. Gross margin improved 60 basis points to 42.8%, supported by lower logistics costs, and SG&A declined 3%, though earnings still eased year over year. Management expects FY2027 revenue to fall by a high-single-digit percentage and EBIT by more than revenue, reflecting continued marketplace cleanup, discounting and fixed-cost deleverage. The company also introduced Pace, a multi-year reorganization intended to produce $2.5 billion of cumulative savings by FY2031, with substantial savings expected in FY2029–30.
Performance and portfolio
- Performance momentum: NIKE Performance grew high single digits in Q1, following mid-single-digit growth to $16 billion in FY2026. Management said growth spanned Running, Global Football, Training, Basketball, Tennis and Golf; excluding the Greater China reset, Performance would have grown low double digits.
- Sportswear reset: Sportswear, just under half of quarterly revenue, declined low double digits. Planned Dunk volume reductions of nearly 50% created an estimated $200 million revenue headwind; aged footwear also sold through below expectations, pressuring future wholesale orders.
- Jordan repositioning: Jordan represented 13% of global business and revenue declined mid-teens. Nike plans to reduce the volume and frequency of selected Retro releases to restore scarcity, with North America expected to feel the greatest near-term impact.
- Product and sport examples: Running grew double digits, with the Vomero-led Max cushioning share nearly tripling over the past year. Global Football grew double digits in all four geographies, and World Cup team-kit sales were twice the level of the 2022 tournament.
China and channels
- Greater China: Revenue declined 26% currency-neutral to $1.18 billion; wholesale fell 31% and Direct 18%. EBIT fell 34% to $248 million. Nike attributed the market pressure to declining traffic, elevated promotion and inventory, and said its guidance assumes China revenue will deteriorate further during the balance of FY2027.
- Marketplace cleanup: Nike is narrowing China digital distribution to official flagship storefronts and working with partners to improve inventory and refresh physical retail. Management said these actions will weigh on near-term revenue and profitability and take multiple seasons.
- Direct versus wholesale: NIKE Brand wholesale revenue was $6.8 billion, down 1% currency-neutral, while NIKE Direct was $4.1 billion, down 9%. Digital sales fell 13% and owned-store sales 5%; North America wholesale grew 9%, helping the region post 2% total growth.
- Other weak areas: EMEA revenue fell 5% currency-neutral and Converse revenue fell 28% to $263 million, with declines across territories. Converse EBIT declined 36% to $25 million.
Margins and earnings
- Gross margin: Margin expanded 60 basis points to 42.8%. Lower warehousing and logistics costs contributed about 90 basis points and favorable currency about 40 basis points; higher discounts, channel mix, royalties and lower Converse margin partly offset the gains.
- Expense discipline: SG&A decreased 3% to $3.91 billion as operating overhead fell 6% to $2.66 billion. Demand creation rose 5% to $1.25 billion, reflecting increased marketing investment around key sports events. SG&A as a share of revenue increased 60 basis points to 34.9%.
- Bottom line: Net income was $712 million versus $727 million a year ago, and diluted EPS was $0.48 versus $0.49. The effective tax rate rose to 22.7% from 21.1%, primarily because of foreign tax audit settlements; EBIT was $907 million, essentially flat year over year.
Pace transformation
- Savings and charges: Pace is expected to deliver about $2.5 billion of cumulative savings through FY2031, before future reinvestment, with approximately $1.0 billion of pre-tax charges. Those charges are additional to about $0.3 billion of severance recognized in FY2026; roughly $0.3 billion is expected in FY2027.
- Timing and structure: Management expects the majority of savings in FY2029 and FY2030, with realization continuing into FY2031. The plan includes supply-chain modernization, a new Bengaluru campus, a three-geography structure planned for FY2028, and further organizational streamlining that will reduce overall roles over time.
- Execution context: Nike said supply-chain actions are already contributing to gross-margin improvement. The savings estimate is subject to implementation risks and assumptions, including local-law requirements, and actual charges and savings may differ.
FY2027 outlook
- Revenue and profit: Full-year revenue is expected to decline high single digits. EBIT is expected to decline by a greater percentage than revenue, reflecting gross-margin pressure and fixed-cost deleverage, partly offset by expense management.
- EPS and taxes: Adjusted diluted EPS is expected at $1.15–$1.35, excluding about $0.15 of Pace restructuring expense. The effective tax rate is expected in the mid-20% range, subject to earnings mix and discrete items.
- Near-term comparison: Q2 revenue growth will face an estimated 400-basis-point headwind from lapping prior-year Cyber Week activity in EMEA and higher North America sell-in. Management expects marketplace actions to pressure revenue through the rest of FY2027 and into FY2028.
- Liquidity and returns: Cash and short-term investments totaled $8.4 billion at quarter end. Operating cash flow was $135 million versus $222 million a year earlier, and Nike returned approximately $610 million through dividends; management described the dividend as a significant capital-allocation priority.
