Nike reported fiscal first-quarter revenue of $11.21 billion, down 4% year over year and below the Zacks Consensus Estimate of $11.4 billion, while earnings of $0.48 per share beat the 44-cent consensus even as they slipped from $0.49 a year ago. Gross margin expanded 60 basis points to 42.8%, but Nike Direct revenue fell 8% on a reported basis, including a 13% decline in digital sales, Greater China revenue plunged 26% on a currency-neutral basis, and Converse revenue dropped 28%. Management now expects fiscal 2027 revenue to decline at a high-single-digit rate and adjusted earnings of just $1.15 to $1.35 per share, a 27% to 14% decline from EPS of $1.58 in FY26, and is restructuring its Sportswear, Jordan Brand, and Greater China businesses with corrective actions stretching beyond FY27. The new Pace initiative targets roughly $2.5 billion in cumulative savings through fiscal 2031 but is expected to generate about $1 billion in pretax restructuring charges. Nike pays a quarterly dividend of $0.41 per share, or $1.64 annually, for a yield of nearly 5%, and has raised its dividend for 24 consecutive years, though Q1 operating cash flow of $135 million fell short of $199 million in capital expenditures and roughly $610 million in dividends, against $8.36 billion in cash and equivalents. The Nike Caitlin 1 signature shoe for WNBA star Caitlin Clark launched globally on Oct. 1 at $140 and sold out in nearly every size within roughly two hours, a bright spot as Nike faces intensified competition for top athletes, including the recent loss of Kylian Mbappé to On Holdings. NKE carries a Zacks Rank #5 (Strong Sell).
Nike IncQ1 revenue fell 4% and FY27 guidance for high-single-digit revenue decline and sharply lower EPS disappointed.
On Holding LtdNike lost top athlete Kylian Mbappé to On Holdings, a competitive gain for On.
Converse revenue dropped 28%, a weak result for Nike's Converse segment.
