NIKE, INC. REPORTS FISCAL 2027 FIRST QUARTER RESULTS
NIKE, Inc. (NKE) filed an SEC Form 8-K — Results of Operations and Financial Condition. Investor Contact: Media Contact: Paul Trussell Sandra Carreon-John investor.relations@nike.com media.relations@nike.com NIKE, INC. REPORTS FISCAL 2027 FIRST QUARTER RESULTS • Sport Offense continued to drive momentum across priority sports • Taking actions to reposition NIKE Spor
How this was made
The 30-second read
Why it matters
The earnings miss and lowered guidance suggest near‑term downside, but the announced savings program may support longer‑term upside.
Market read
Nike's results are a key barometer for the consumer discretionary sector and may influence peer apparel stocks.
What to watch
Strong North American growth and brand marketing spend may cushion the decline; inventory reduction could improve cash flow.
NIKE, INC. REPORTS FISCAL 2027 FIRST QUARTER RESULTS
Revenue declined 4 percent, led by Greater China, EMEA, NIKE Direct and Converse, while gross margin expanded 60 basis points, selling and administrative expense declined 3 percent, and diluted earnings per share was $0.48.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenuesGAAP | $11.21B | – | -4 % |
| Cost of salesGAAP | 6,415 | – | -5 % |
| Gross profitGAAP | 4,798 | – | -3 % |
| Gross marginGAAP | 42.8 % | – | 60 bps |
| Demand creation expenseGAAP | 1,252 | – | 5 % |
| Operating overhead expenseGAAP | 2,658 | – | -6 % |
| Total selling and administrative expenseGAAP | 3,910 | – | -3 % |
| Total selling and administrative expense as a percentage of revenuesGAAP | 34.9 % | – | 60 bps |
| Interest (income) expense, netGAAP | (14) | – | – |
| Other (income) expense, netGAAP | (19) | – | – |
| Income before income taxesGAAP | 921 | – | 0 % |
| Income tax expenseGAAP | 209 | – | 7 % |
| Effective tax rateGAAP | 22.7 % | – | 160 bps |
| Net incomeGAAP | $712M | – | -2 % |
| Basic earnings per common shareGAAP | $ 0.48 | – | – |
| Diluted earnings per common shareGAAP | $ 0.48 | – | – |
| Weighted average common shares outstanding, BasicGAAP | 1,483.6 | – | – |
| Weighted average common shares outstanding, DilutedGAAP | 1,484.2 | – | – |
| Dividends declared per common shareGAAP | $ 0.410 | – | – |
| Total NIKE Brand EBITnon-GAAP | 1,360 | – | -3 % |
| Converse EBITother | 25 | – | -36 % |
| Corporate EBITother | (478) | – | 11 % |
| Total NIKE, Inc. EBITnon-GAAP | 907 | – | 0 % |
| Net income marginother | 6.3 % | – | – |
| EBIT marginnon-GAAP | 8.1 % | – | – |
| Cash and equivalentsGAAP | $6.90B | – | -2 % |
| Short-term investmentsGAAP | 1,465 | – | -6 % |
| Accounts receivable, netGAAP | 5,242 | – | 6 % |
| InventoriesGAAP | 7,846 | – | -3 % |
| Total current assetsGAAP | 23,673 | – | -1 % |
| Property, plant and equipment, netGAAP | 4,887 | – | 1 % |
| Operating lease right-of-use assets, netGAAP | 2,947 | – | 8 % |
| TOTAL ASSETSGAAP | $37.79B | – | 1 % |
| Current portion of long-term debtGAAP | $2B | – | 100 % |
| Long-term debtGAAP | 5,893 | – | -26 % |
| Total current liabilitiesGAAP | 11,409 | – | 5 % |
| Shareholders' equityGAAP | 15,220 | – | 13 % |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITYGAAP | $37.79B | – | 1 % |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North AmericaFootwear was $ 3,259, up 1 %; Apparel was $ 1,566, up 6 %; and Equipment was $ 302, down -8 %. | $5.13B | – | 2 % |
| Europe, Middle East & AfricaFootwear was $ 1,798, down -11 %; Apparel was $ 1,163, up 5 %; and Equipment was $ 215, up 5 %. | $3.18B | – | -5 % |
| Greater ChinaFootwear was $ 866, down -22 %; Apparel was $ 279, down -23 %; and Equipment was $ 35, down -15 %. | $1.18B | – | -22 % |
| Asia Pacific & Latin AmericaFootwear was $ 1,028, down -3 %; Apparel was $ 376, up 1 %; and Equipment was $ 59, up 2 %. | $1.46B | – | -2 % |
| Global Brand DivisionsGlobal Brand Divisions revenues include NIKE Brand licensing and other miscellaneous revenues that are not part of a geographic operating segment. | 2 | – | – |
| ConverseDeclines across all territories. | 263M | – | -28 % |
| CorporateCorporate revenues primarily consist of foreign currency gains and losses related to revenues generated by entities within the NIKE Brand geographic operating segments and Converse. | (2) | – | – |
| NIKE Brand FootwearNIKE Brand revenues declined primarily due to declines in Greater China and EMEA, partially offset by growth in North America. | $6.95B | – | -6 % |
| NIKE Brand ApparelNIKE Brand Apparel revenue increased 2 %. | 3.38B | – | 2 % |
| NIKE Brand EquipmentNIKE Brand Equipment revenue declined 3 %. | 611M | – | -3 % |
| NIKE Brand Sales to Wholesale CustomersNIKE Brand wholesale revenues declined primarily due to declines in Greater China, partially offset by growth in North America. | $6.80B | – | -1 % |
| NIKE Brand Sales through NIKE DirectThe decline reflected a 13 percent decrease in NIKE Brand Digital and a 5 percent decrease in NIKE-owned stores. | 4.14B | – | -8 % |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
fiscal 2027 outlook
- Revenuedecline high-single digits
- Tax ratemid-20 percent range
- NoteAdjusted Diluted earnings per share is expected to be in the range of $1.15 to $1.35.
- NoteAdjusted Diluted earnings per share excludes approximately $0.15 of restructuring expenses related to Pace for fiscal 2027.
- NoteNIKE expects Pace to deliver approximately $2.5 billion in cumulative savings through fiscal 2031.
- NoteNIKE expects approximately $1.0 billion of pre-tax charges, primarily consisting of employee-related costs, through fiscal 2031, in addition to approximately $0.3 billion of severance costs recognized in fiscal 2026.
- NoteNIKE expects approximately $0.3 billion to be recognized in fiscal 2027.
Capital returns
- The Company returned approximately $610 million to shareholders through dividends, up 3 percent from the prior year.
- Dividends declared per common share were $ 0.410, compared to $ 0.400.
What drove it
- The Sport Offense continued to drive momentum across priority sports.
- Gross margin expanded 60 basis points primarily due to lower warehousing and logistics costs.
- Demand creation expense increased 5 percent primarily due to higher brand marketing expense, reflecting higher investment in key sports events.
- Operating overhead expense declined 6 percent primarily due to lower wage-related expense and lower other administrative costs.
- North America revenue grew 2 percent, while Greater China declined 22 percent and EMEA declined 5 percent.
- NIKE Direct revenue declined 8 percent, including a 13 percent decrease in NIKE Brand Digital and a 5 percent decrease in NIKE-owned stores.
Concerns
- NIKE Brand revenue declined 4 percent, with declines in Greater China and EMEA.
- Greater China revenue declined 22 percent on a reported basis and 26 percent excluding currency changes.
- Converse revenue declined 28 percent due to declines across all territories.
- NIKE Direct revenue declined 8 percent and NIKE Brand Digital declined 13 percent.
- The effective tax rate increased to 22.7 percent from 21.1 percent, primarily due to foreign tax audit settlements recognized in the current year.
- Fiscal 2027 revenues are expected to decline high-single digits.
- Pace estimates are subject to assumptions, and actual savings, charges and cash expenditures may differ, possibly materially, from these estimates.
What to watch
- Progress repositioning NIKE Sportswear, Jordan Brand and Greater China.
- Execution of Pace, including supply-chain modernization, the new campus in India, a realignment to three geographies and organizational streamlining.
- Delivery of approximately $2.5 billion in cumulative Pace savings through fiscal 2031.
- The timing and magnitude of approximately $1.0 billion of expected pre-tax Pace charges through fiscal 2031 and approximately $0.3 billion expected to be recognized in fiscal 2027.
- The fiscal 2027 high-single-digit revenue-decline outlook, mid-20 percent effective-tax-rate outlook and $1.15 to $1.35 adjusted diluted earnings-per-share outlook.
Balance sheet and cash flow
- Cash and equivalents and Short-term investments were $8.4 billion, down approximately $0.2 billion, as cash generated by operations was more than offset by cash dividends and capital expenditures.
- Cash and equivalents were $ 6,903 and Short-term investments were 1,465.
- Inventories were $ 7,846, down 3 percent, primarily reflecting shifts in product mix.
- Current portion of long-term debt was $ 2,000 and long-term debt was 5,893.
Analysis
NIKE reported fiscal 2027 first-quarter revenue of $ 11,213, down 4 %, while net income declined 2 % to $ 712 and diluted earnings per share was $ 0.48. The revenue result reflected a 4 % decline in NIKE Brand and a 28 % decline at Converse. The release identifies Greater China and EMEA as the principal sources of NIKE Brand pressure, partially offset by North America growth.
Regional mix was uneven. North America revenue increased 2 % to $ 5,127, with Apparel up 6 % and Footwear up 1 %. Greater China revenue fell 22 % to $ 1,180, including a 22 % decline in Footwear and a 23 % decline in Apparel. EMEA revenue declined 5 % to $ 3,176, as an 11 % footwear decline more than offset growth in Apparel and Equipment. Asia Pacific & Latin America declined 2 % to $ 1,463.
Channel performance also remained pressured in Direct. NIKE Brand sales through NIKE Direct declined 8 % to 4,142, with a 13 percent decrease in NIKE Brand Digital and a 5 percent decrease in NIKE-owned stores. NIKE Brand wholesale revenue declined 1 % to $ 6,804. The contrast between wholesale and Direct, together with a 28 % Converse decline, puts the company focus on product-portfolio health and the planned repositioning of NIKE Sportswear, Jordan Brand and Greater China in context.
Profitability improved at the gross-margin line despite the sales decline. Gross margin expanded 60 bps to 42.8 % primarily due to lower warehousing and logistics costs. Total selling and administrative expense fell 3 % to 3,910, as a 6 % reduction in operating overhead offset a 5 % increase in demand creation expense for brand marketing and key sports events. Total NIKE, Inc. EBIT was 907, up 0 %, and EBIT margin was 8.1 % versus 7.7 %.
Capital allocation included approximately $610 million returned through dividends, while cash and equivalents and short-term investments were $8.4 billion. The company introduced Pace, targeting approximately $2.5 billion in cumulative savings through fiscal 2031, before expected charges and future reinvestment. Fiscal 2027 guidance calls for a high-single-digit revenue decline, a mid-20 percent effective tax rate and adjusted diluted earnings per share of $1.15 to $1.35, excluding approximately $0.15 of Pace restructuring expenses.
Management, verbatim
The Sport Offense is driving measurable progress across our performance business, and we introduced Pace to help us accelerate and scale that momentum across NIKE.
Elliott Hill, President and Chief Executive Officer, NIKE, Inc.
We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we're taking deliberate actions to strengthen those businesses the right way for the long-term.
Elliott Hill, President and Chief Executive Officer, NIKE, Inc.
We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management.
Dave Denton, Executive Vice President and Chief Financial Officer, NIKE, Inc.
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparison of reported results with prior guidance is unavailable.
- Operating cash flow amount was not reported.
- Free cash flow was not reported.
- Share repurchases were not reported.
- Gross-margin guidance was not provided.
- Operating-expense guidance was not provided.
- Quarterly or second-quarter fiscal 2027 guidance was not provided.
- Prior-quarter comparisons were not reported for the presented income-statement, segment, channel, EBIT and balance-sheet metrics.
- Percentage changes were not reported for basic earnings per common share, diluted earnings per common share, weighted average common shares outstanding, dividends declared per common share, interest (income) expense, net, other (income) expense, net, net income margin or EBIT margin.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Nike's Q1 release follows a March 2026 cost‑realignment plan and outlines the new Pace transformation.
Ticker impact
Nike reported fiscal 2027 Q1 revenue of $11.2B (down 4%) and EPS $0.48, with guidance for FY revenue decline and EPS $1.15‑$1.35.
likely pressure as investors price in revenue decline and lower EPS guidance
Revenue fell year‑over‑year, EPS missed expectations and outlook signals high‑single‑digit revenue decline, prompting sell‑offs.
Market effects
Athletic apparel sector may see broader pressure as Nike's slowdown hints at weaker consumer demand.
U.S. consumer discretionary index could dip modestly.
Limited to apparel and footwear markets; no major macro spillover.
Counterpoint
If Nike's cost‑saving Pace program delivers $2.5B savings, the stock could rebound on long‑term margin upside.
Key entities
- ExecutiveElliott Hill
Nike CEO who commented on the Sport Offense and Pace program.
- ExecutiveDave Denton
Nike CFO who discussed margin expansion and expense reductions.
