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Nike’s Q1 FY27 Earnings Deepen Questions About Its Turnaround

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Nike reported first-quarter fiscal 2027 results on October 1, 2026, and the update offers little basis to call its turnaround complete: revenue fell 4% to $11.2 billion, and the company expects revenue to decline by a high-single-digit percentage for FY27. Gross margin improved modestly, but NIKE Direct and Converse remained weak. Nike’s new Pace program promises multiyear savings, while adding costs and execution risks.

What were Nike’s earnings?

For the quarter ended August 31, 2026, NIKE, Inc. reported revenue of $11.2 billion, down 4% year over year on a reported basis and 5% currency-neutral. Net income was $0.7 billion, down 2%, and diluted earnings per share (EPS) were $0.48. Gross margin expanded 60 basis points to 42.8%.

The margin gain and the sales decline are both important to the result. Nike also reported selling and administrative expense down 3%, but lower expenses and a higher gross margin did not prevent revenue from shrinking. The company’s full release provides the detailed results at Nike’s Q1 FY27 results.

Where are the sales declines concentrated?

The channel split suggests that growth is not yet broad-based. Wholesale held up better than Nike’s direct-to-consumer business, while weakness in Greater China and EMEA weighed on Nike Brand results.

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Business or channel Q1 FY27 revenue Change
NIKE Brand $11.0 billion Down 4%
Wholesale $6.8 billion Down 1%
NIKE Direct $4.1 billion Down 8% reported; down 9% currency-neutral
NIKE Brand Digital Not separately stated in the results summary Down 13%
Nike-owned stores Not separately stated in the results summary Down 5%
Converse $263 million Down 28%

Nike attributed NIKE Brand weakness primarily to declines in Greater China and EMEA, partly offset by North American growth. It did not provide regional revenue values in the results summary, so the size of those regional movements cannot be compared here.

Is Nike’s turnaround working?

The results show a mixed picture, not proof of a durable recovery. Nike CEO Elliott Hill said the company’s Sport Offense strategy was driving measurable progress in its performance business. That is management’s characterization; the reported figures establish a modest margin improvement, but still show falling revenue and pronounced weakness in NIKE Direct and Converse. Hill also said Nike has more work to do in Sportswear, Jordan Brand and Greater China.

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Inventory was $7.8 billion on August 31, down 3% year over year, primarily reflecting shifts in product mix. Cash and equivalents plus short-term investments totaled $8.4 billion. These balance-sheet figures provide context, but do not by themselves establish that demand has recovered.

Why the Q4 margin comparison needs care

Q1 FY27’s 60-basis-point gross-margin expansion is modest compared with the prior quarter. In Q4 FY26, revenue was $11.0 billion, down 1%, while NIKE Direct fell 7%. Gross margin rose 890 basis points to 49.2%; Nike attributed approximately 900 basis points of benefit to expected recovery of IEEPA tariffs. Q4 diluted EPS of $0.72 included a $0.52 benefit related to that expected recovery.

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That tariff-related effect makes Q4’s reported margin and EPS poor evidence, on their own, of an underlying operating rebound. The figures are company-reported, and the tariff recovery was described as expected. See Nike’s Q4 FY26 results for the company’s account.

What is Nike’s FY27 outlook?

Nike expects FY27 revenue to decline by a high-single-digit percentage. It forecasts adjusted diluted EPS of $1.15–$1.35, excluding about $0.15 of Pace-related restructuring expenses. Adjusted EPS is a non-GAAP measure, so it should not be treated as interchangeable with reported diluted EPS.

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This outlook is the clearest reason the turnaround question remains open: management expects another year of substantial top-line contraction even while pointing to progress in performance products and cost discipline. The release does not establish when revenue growth will return.

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What is Pace, and what could it cost?

Nike describes Pace as an operating-model transformation intended to accelerate and scale its Sport Offense strategy. Its announced measures include modernizing the global supply chain, establishing an India campus for enterprise capabilities, moving to three geographies, and further streamlining the organization.

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Pace estimate or item Nike’s stated figure and timing
Cumulative savings Approximately $2.5 billion through fiscal 2031
Pre-tax charges Approximately $1.0 billion through fiscal 2031
FY27 Pace charges Approximately $0.3 billion
FY26 severance costs already recognized Approximately $0.3 billion, in addition to the estimated Pace charges above

The savings are management estimates, not guaranteed net gains: the stated figure is cumulative and before estimated charges and future reinvestment. The company cautions that actual savings, charges and cash expenditures may differ materially from its estimates. Nike’s filing also identifies execution disruption, competition, innovation, changing consumer preferences, demand forecasting and channel mix among the risks that could affect results. These are disclosed risks, not predictions that any one of them will occur. The filing is available from the SEC.

When did Nike report earnings?

Nike reported Q1 FY27 results on October 1, 2026. The quarter ended August 31, 2026. The company’s investor-relations news and events page lists its announcements and reporting materials.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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