NIKE, Inc. Beats EPS and Misses Revenue in Q1 2027

NIKE, Inc. (NYSE:NKE) reported its fiscal 2027 first quarter results for the period ending August 31, 2026. The company experienced a revenue decline of $0.5 billion, or -4% year-over-year, with total revenues reported at $11.2 billion. This performance reflects ongoing challenges, particularly in key markets such as Greater China and EMEA, despite some growth in North America.

Key Financial Metrics:

• Total Revenues: $11.2 billion, down $0.5 billion or -4% YoY
• Gross Margin: 42.8%, up 60 basis points from the previous year
• Selling and Administrative Expenses: $3.9 billion, down 3% YoY
• Diluted Earnings Per Share (EPS): $0.48, down from $0.49 YoY
• Net Income: $0.7 billion, down 2% YoY

Analyst Opinion

This quarter can be viewed as disappointing for shareholders, primarily due to the revenue decline. While the company managed to improve its gross margin and reduce selling and administrative expenses, the overall drop in revenue indicates ongoing headwinds in key markets. The decline in NIKE Brand revenues, particularly in Greater China, raises concerns about the company's ability to regain momentum in this critical region.

Detailed Financial Analysis

• Revenue Breakdown:
  • NIKE Brand Revenues: $11.0 billion, down 4% YoY
    • Wholesale Revenues: $6.8 billion, down 1% YoY
    • Direct Revenues: $4.1 billion, down 8% YoY
  • Converse Revenues: $263 million, down 28% YoY
• Cost Management:
  • The gross margin improvement to 42.8% was driven by lower warehousing and logistics costs, which is a positive sign for operational efficiency.
  • Selling and administrative expenses decreased by 3% to $3.9 billion, indicating effective cost management strategies.
• Earnings Performance:
  • Diluted EPS of $0.48 reflects a slight decrease from $0.49 in the prior year, which may not meet investor expectations given the revenue challenges.

Shareholder Returns

NIKE returned approximately $610 million to shareholders through dividends, marking a 3% increase from the prior year. This commitment to returning capital is a positive aspect for investors, even amidst the revenue decline.

Guidance and Future Outlook

Looking ahead, NIKE anticipates a challenging fiscal 2027, with revenues expected to decline in the high-single digits. The effective tax rate is projected to be in the mid-20 percent range. Importantly, the company has provided guidance for adjusted diluted EPS in the range of $1.15 to $1.35, excluding approximately $0.15 of restructuring expenses related to the new operating model transformation, Pace.

Forward Catalyst

Investors should closely monitor the implementation of the Pace operating model, which aims to deliver approximately $2.5 billion in cumulative savings through fiscal 2031. The success of this initiative, along with improvements in key markets like Greater China and the effectiveness of cost management strategies, will be critical for NIKE's performance in the upcoming quarters. Additionally, any updates on product portfolio enhancements and market repositioning efforts will be key indicators of the company's ability to rebound from this quarter's challenges.

NIKE, Inc. Condensed Consolidated Statements of Income (Unaudited)

(In millions except per share data)

Note: All amounts are in millions.

NIKE, Inc. Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in millions)

Note: All amounts are in millions.

Quarterly Earnings — Revenue vs. Estimate

Revenue vs. Estimate — 5 Quarters

EPS vs. Estimate — 5 Quarters

Analyst Ratings & Price Targets

Wall Street analysts have recently adopted a cautious stance on NIKE, Inc. (NKE), with multiple downgrades and lowered price targets reflecting growing concerns. BofA Securities and BMO Capital Markets initiated or shifted to Underperform ratings, setting targets at $30, while Morgan Stanley resumed coverage with an Equal-Weight rating and a $31 target. JP Morgan and Truist also downgraded the stock to Underweight and Hold, respectively, with targets of $40 and $42. Telsey Advisory Group reiterated a Market Perform rating but trimmed its target from $47 to $44. The consensus price target now implies limited upside—or potential downside—from NKE’s current trading level, signaling skepticism about near-term performance amid macroeconomic pressures and competitive challenges. The prevailing analyst sentiment suggests subdued expectations for the athleticwear giant. (150 words)

Technical Analysis — 90-Day Price Chart

NIKE, Inc. (NKE) is trading at $35.15, below all key moving averages—SMA20 ($36.49), SMA50 ($38.85), and SMA200—confirming a bearish trend. The recent death cross (SMA50 below SMA200) reinforces downward momentum. The RSI(14) at 35.7 suggests the stock is approaching oversold territory but hasn’t yet signaled a reversal. Volume surged to 95.2M shares, more than double the 20-day average of 37.5M, indicating heightened selling pressure. NKE is testing its 52-week low of $35.02, which now acts as critical support; a breach could trigger further downside. With the 52-week high at $46.73, resistance levels remain distant, and the stock’s position near the lower bound reflects persistent weakness. A sustained RSI rebound or volume-backed rally above SMA20 may be needed to shift sentiment.