Nike shares fell 5.5% in the morning session after the athletic apparel brand reported a 4% sales decline and issued weaker-than-expected full-year profit guidance. The company guided fiscal 2027 revenues to decline by high single digits and estimated adjusted diluted earnings per share between $1.15 and $1.35, missing analyst expectations of $1.68 per share amid product challenges and an ailing China business. For calendar Q3 2026, which is fiscal Q1 2027, sales fell 4.3% year on year to $11.21 billion, short of revenue expectations, while GAAP profit of $0.48 per share came in 9.9% above analysts' consensus estimates and gross margin expanded 60 basis points to 42.8% on lower logistics costs. Chief Financial Officer Dave Denton warned on the call that China's revenue will worsen for the balance of the year as Nike cleans up promotional distribution, and Chief Executive Officer Elliott Hill said deliberately reducing Dunk production by nearly half created a roughly $200 million headwind in Sportswear. Denton also noted that the bulk of savings from the Pace operating model transformation, which targets approximately $2.5 billion in cumulative savings through fiscal 2031, will not ramp until fiscal 2029 and 2030.
Nike IncNike issued weaker-than-expected FY2027 guidance with adjusted EPS of $1.15-$1.35 versus $1.68 consensus and high-single-digit revenue decline.
