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Before buying Nike (NIKE), check whether its latest sales and earnings support the recovery implied by the share price. Fiscal 2026 revenue was $46.4 billion, flat as reported and down 2% on a currency-neutral basis, while diluted earnings per share (EPS) fell 3% to $2.10. The first quarter of fiscal 2027 brought further revenue declines, including a sharp drop in Greater China. Wholesale growth and a stabilized annual gross margin are positive signs, but weakness in NIKE Direct, digital sales, Converse and China makes the turnaround an open question—not an established result.
Use the company’s fiscal 2026 annual report and its first-quarter fiscal 2027 results as the operating baseline, then compare a fresh share price with both reported and normalized earnings. The figures below are company-reported; the annual financial statements are audited. This is an analytical checklist, not a buy or sell recommendation.
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Start with what the latest results say
NIKE’s fiscal year ended May 31, 2026; its latest reported quarter in this analysis ended August 31, 2026. Keep the periods distinct: the full-year results show the longer trend, while the quarter gives a newer, but shorter, signal.
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1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitches“Reported” growth reflects the figures as published. “Currency-neutral” growth adjusts for exchange-rate movements to make operating comparisons across periods easier. The two can differ, so check both rather than treating them as interchangeable.
#1 Best Overall
| Measure | Fiscal 2026 | Q1 fiscal 2027 |
|---|---|---|
| Revenue | $46.4 billion; flat reported and down 2% currency-neutral (NIKE, Inc., 2026) | $11.2 billion; down 4% reported and 5% currency-neutral (NIKE, Inc., 2026) |
| Gross margin | 42.9%, up 20 basis points year over year (NIKE, Inc., 2026) | 42.8%, up 60 basis points year over year (NIKE, Inc., 2026) |
| Net income and diluted EPS | $3.1 billion net income and $2.10 diluted EPS; each down 3% year over year (NIKE, Inc., 2026) | Not stated in the cited Q1 results |
| Inventory | $7.5 billion at May 31, flat year over year (NIKE, Inc., 2026) | $7.8 billion at August 31, up 5% from May 31, mainly due to product-mix shifts (NIKE, Inc., 2026) |
The fiscal 2026 gross-margin increase indicates stabilization, not necessarily a broad recovery in demand or earnings: net income and EPS both declined. In Q1, management attributed the margin improvement mainly to lower warehousing and logistics costs. Discounts, channel mix, foreign exchange, product costs, royalties and Converse also affected the margin bridge. Selling and administrative expenses were $3.91 billion, or 34.9% of revenue, compared with 34.3% a year earlier.
Check whether sales are healthy across channels
NIKE sells through wholesale accounts and its own NIKE Direct channel, which includes owned stores and NIKE Brand Digital. A shift between channels can affect growth and profitability, so an investor should not rely on total revenue alone.
Rank #2
| Fiscal 2026 sales measure | Reported change | Currency-neutral change |
|---|---|---|
| Wholesale revenue: $27.5 billion | Up 6% | Up 4% |
| NIKE Direct revenue: $17.7 billion | Down 6% | Down 8% |
| NIKE Brand Digital | Not stated separately | Down 12% |
| NIKE-owned store sales | Down 4% | Not stated separately |
| Converse revenue: $1.2 billion | Down 31% | Down 32% |
Wholesale gains alongside falling Direct and digital sales are a divergence to monitor, not proof by themselves that one channel is permanently replacing another. In Q1 fiscal 2027, NIKE Brand wholesale revenue was $6.8 billion, essentially flat reported and down 1% currency-neutral; NIKE Direct revenue fell 9% currency-neutral. Brand Digital fell 13% currency-neutral, while owned-store sales fell 5%.
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Also look at what is selling. In Q1, footwear revenue fell 6% currency-neutral, with a lower average selling price contributing about one percentage point of that decline; apparel revenue rose 2% currency-neutral. Lower average selling prices can reflect product mix or pricing pressure, so pair the figure with management’s explanations and subsequent margin and inventory data.
Separate broad performance from regional and brand resets
Fiscal 2026 NIKE Brand revenue was $45.2 billion, up 1% reported and down 1% currency-neutral. North America growth was offset by declines in Greater China and EMEA. That unevenness continued in Q1 fiscal 2027: North America was up 2% both reported and currency-neutral, while Greater China revenue fell 22% reported and 26% currency-neutral. Converse revenue fell 28% reported in the quarter.
Management said actions in Greater China—including addressing declining traffic, promotions and elevated marketplace inventory—extend beyond fiscal 2027 in some areas. It also said the Converse strategic reset is expected to continue through fiscal 2027. Treat these as management’s description of plans and timing, not evidence that the resets have already worked. In later filings, check whether regional sales, sell-through, discounts and brand results improve together.
Rank #4
Adjust unusual items before judging earnings power
Do not treat fiscal 2026 Q4’s 49.2% gross margin as a normal run rate: the quarter’s result included an approximately 900-basis-point benefit from expected recovery of $986 million in IEEPA tariffs. Q4 diluted EPS of $0.72 included $0.52 related to that expected recovery. Because the earnings benefit is tied to an expected recovery, it is not a clean recurring earnings base; a valuation based on it without adjustment could overstate underlying profitability.
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Longer-term history adds context but does not establish a forecast. NIKE’s reported net income was $3.1 billion in fiscal 2026, $3.2 billion in fiscal 2025 and $5.7 billion in fiscal 2024. EBIT margin—the ratio of earnings before interest and taxes to revenue—was 8.3%, 8.2% and 12.7%, respectively. The earlier margin level is a historical comparison, not evidence that margins will return to it.
Best Value
Test the valuation against more than one earnings measure
A valuation depends on the price paid relative to the earnings and cash flows NIKE can sustain. There is no live share price, current valuation multiple or analyst consensus established here, so a specific current P/E or price target would not be grounded in these figures. Get a fresh quote and the latest filing before doing price-dependent calculations.
- Record the inputs. Note the date and share price, shares outstanding from the latest filing, cash and debt, and the reporting period used for earnings. NIKE reported $9.0 billion in cash and equivalents plus short-term investments at May 31, 2026; use the latest filing for any current balance-sheet calculation.
- Calculate trailing P/E. Divide the share price by trailing 12-month diluted GAAP EPS, making sure the EPS period aligns with the quote date. Fiscal 2026 diluted EPS of $2.10 is a backward-looking annual figure, not a forecast or a clean normalized denominator.
- Build a normalized case. Start from recurring operating performance and explicitly adjust for unusual benefits such as the Q4 expected tariff-recovery benefit. State each adjustment and its rationale; do not label an optimistic recovery assumption as an observed result.
- Cross-check enterprise value. Compare market capitalization plus debt, less cash, with operating earnings and cash flow. Use balance-sheet figures from the same latest filing and explain the periods and adjustments behind the earnings and cash-flow measures.
- Make assumptions visible. For downside, base and upside cases, specify what you assume for sales, gross margin, operating expenses and regional recovery. Check whether the current price only makes sense in the most optimistic case, or can be supported under more moderate assumptions too.
Use the valuation exercise to make the market’s implied recovery assumptions explicit. A multiple is not meaningful without its earnings definition, period and treatment of unusual items.
Track the risks that could disrupt a recovery
- Demand, fashion and innovation: consumer preferences can shift faster than product lead times. Products that fail to resonate can weaken sales and leave inventory that needs discounting.
- Inventory and pricing: NIKE described marketplace actions involving markdowns and wholesale discounts or returns to reduce inventory and make room for new products. Such actions may help move units while pressuring average selling prices or gross margin. The Q1 inventory increase alone does not establish a problem; follow inventory units and age, sell-through and markdowns in later reporting.
- Brand and supplier conduct: NIKE’s brand depends on product quality, innovation, marketing and consumer perception. The company also warns that supplier violations or allegations can harm its reputation even though it does not control supplier practices.
- Trade, currency and supply chain: NIKE cites tariffs, foreign exchange, geopolitical dynamics and tax regulation as uncertainties. Nearly all of its products are made by independent contractors, and nearly all footwear, apparel and equipment are manufactured outside the United States, creating exposure to cross-border sourcing and execution.
- Competition and channel execution: the business relies on consumer connections, wholesale accounts, owned stores and digital platforms, as well as launches that sell through. Weak demand or execution can affect both revenue and profitability.
Use management commentary as context, not proof
After fiscal 2026, CEO Elliott Hill said NIKE continued to face “top-line headwinds” and was focused on execution, profitability and scaling successful products. CFO Matthew Friend said sell-through remained challenged. These are management’s views. Evaluate them against the reported revenue, channel, regional, margin and inventory trends rather than treating the statements as independent confirmation of a turnaround.
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