NIKE Trades 28% Below Its Usual Earnings Multiple. Here’s Why That Doesn’t Make It Cheap Yet

NIKE reported fiscal Q1 2027 sales of $11.2B and net income of $712M, with guidance for a high single-digit revenue decline for the full year. The company faces pressure in Greater China, weakness in Sportswear and Jordan, and is implementing restructuring and cost-cutting measures. Investors are focused on whether these challenges will stabilize by fiscal 2027, with management projecting $48.5B revenue and $3.7B earnings by 2029.

Lululemon's chief product officer and chief supply chain officer will depart. CFO Meghan Frank will oversee global brand and technology in the interim. According to LSEG data cited by Reuters, Lululemon's net income could drop nearly 40% this year versus fiscal 2024.

Nike (NKE) shares fell to a 13-year low after Q1 earnings and guidance. Revenue is expected to decline in fiscal 2027. The stock's decline, paired with 24 years of dividend increases, has pushed its yield to 4.8%, the highest in the Dow. Nike faces revenue declines in key brands, inflation, and a slowdown in China. Dividends are outpacing free cash flow, raising sustainability concerns. Management prioritizes dividends but may cut them if conditions worsen.

Nike's stock dropped to a 13-year low after Q1 fiscal 2027 earnings and guidance forecasted a high single-digit revenue decline. Its dividend yield surged to a record 4.8%, the highest in the Dow. Nike faces challenges including double-digit revenue declines in key brands, inflation, and a slowdown in China. The company's free cash flow is being outpaced by dividends and capital expenditures, raising concerns about dividend sustainability.

Nike Inc. filed its 10Q report, prompting mixed reactions from analysts. BNP Paribas noted reduced transparency due to discontinued regional comparable store sales disclosures, while Guggenheim highlighted positive signs like North America footwear unit growth and improved margins. Nike's stock is currently trading around $34, with BNP Paribas maintaining an 'underperform' rating and a $19 price target.

Nike (NKE) reported a 26% decline in Greater China revenue for Q1 2027, with management expecting further high single-digit revenue declines for the fiscal year. Total revenue fell 4% to $11.2 billion. Management guided adjusted earnings of $1.15 to $1.35 per share for fiscal 2027, below analyst estimates. The company is undergoing a 'marketplace reset' in China, aiming to position itself as a premium brand, but expects near-term revenue and profitability hits.