Nike revenue falls 4% to $11.2B, missing estimates; company announces restructuring plan
Nike (NKE) reported $11.21B in Q1 FY2027 earnings, coming in below estimates, and announced it will overhaul its operating model in several key areas. Nike stock is down about 10% premarket, as of the time of writing (1).
Headline Numbers
- Revenue: $11.21B (-4.33% YoY), misses by $132.71M.
- EPS: $0.48 (-2.04% YoY), beats by $0.04.
Additional Metrics
- Gross margin: 42.8%, expanding 60 basis points.
- SG&A: $3.9B, down 3%.
- Net income: $0.7B, down 2%.
Outlook
- Revenue: High single-digit decline expected for FY2027.
- Effective tax rate: Expected in the mid-20% range for FY2027.
- Adjusted diluted EPS: Expected to be $1.15–$1.35, excluding restructuring expenses.
More Takeaways
- The Nike Brand revenue decrease was mainly due to fewer sales in China and the EMEA, though this was somewhat offset by North American growth. The same is true for wholesale revenues, which came in at $6.8B, down 1% (1, 2).
- Nike Direct revenue fell 8% to $4.1B, attributed to a decline in Nike Brand Digital and a 5% drop in stores (1).
- Converse brought in $263M, down 28%. Sales were lower across all regions (1).
Restructuring Plan
- The company also announced Pace, a restructuring overhaul that expands upon a previous plan announced in March. The plan is expected to generate about $2.5B in cost savings by the end of FY2031 (1, 3).
- Under Pace, Nike plans to modernize its supply chain, add a new campus in India, "realign" to three geographies — the Americas, Asia Pacific and Greater China (APGC), and EMEA — and streamline operations further (1).
- In a separate release, the company also noted that the program will include some workforce reductions, set to begin next year. It's not yet known how high the numbers will be or which locations will be impacted (1, 4).
- Remarking on the expected impact of Pace, Nike CEO and President Elliott Hill said: "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" (1).
- Nike will provide more information about its growth strategy, Pace, and financial plan at its Investor Day, scheduled for November 16–17 (4).
Sources & Further Reading
- "NIKE, Inc. Reports Fiscal 2027 First Quarter Results." NIKE, Inc. October 1, 2026.
- "NIKE, Inc. Current Report on Form 8-K." U.S. Securities and Exchange Commission. October 1, 2026.
- "NIKE, Inc. Current Report on Form 8-K." U.S. Securities and Exchange Commission. February 27, 2026.
- "NIKE, Inc. Announces Changes to Its Operating Model." NIKE Inc. October 1, 2026.
