S&P Global Ratings has downgraded Nike Inc's credit rating to 'A' from 'A+', citing a prolonged turnaround across its key lifestyle segments and severe top-line deterioration in Greater China. The agency warned that the apparel giant faces negative cash flow generation over the next two to three years as restructuring costs and necessary reinvestments weigh on profitability. S&P expects Nike's consolidated revenue to contract by more than 7% in fiscal 2027 and weaken further in fiscal 2028, compounded by an incremental $1 billion in restructuring charges tied to an ongoing corporate overhaul. A steep downturn in Greater China remains a central driver, highlighted by a 26% top-line plunge in the first fiscal quarter, with the agency forecasting China revenue to fall approximately 30% for the full fiscal year, a dramatic retreat for a market that generated more than a fifth of total company sales at its peak. Nike maintains $11.4 billion in total liquidity, and S&P expects it to absorb a projected $1.2 billion annual cash burn after dividend outlays by suspending share buybacks, scaling back capital expenditures, and using cash reserves to satisfy upcoming debt maturities through early 2027, while the negative outlook flags the potential for further cuts over the next 12 to 24 months.
Nike IncS&P downgraded Nike's credit rating to 'A' from 'A+', citing negative cash flow, restructuring charges, and revenue contraction.
