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Nike stock fell as much as 6.6% after Q1 revenue missed, Greater China sales dropped 26% and the company guided to a high-single-digit annual decline.
- Q1 revenue fell 4% to $11.21 billion, short of the roughly $11.3 billion consensus; EPS of $0.48 beat.
- Greater China sales dropped 26% on a currency-neutral basis, and fiscal 2027 revenue is guided down by a high-single-digit percentage.
- Adjusted EPS guidance of $1.15 to $1.35 sits below the $1.61 consensus; Nike also launched a $2.5 billion cost program.
Lead
Nike (NYSE: NKE) shares slid as much as 6.6% in extended trading on Thursday, October 1, after the company reported a revenue miss for its fiscal first quarter, a 26% currency-neutral drop in Greater China sales and a full-year outlook below Wall Street forecasts. The stock had closed the regular session near $35.10. In the after-hours session it traded as low as about $32.78, its weakest level since 2013.Revenue for the quarter ended August 31 fell 4% to $11.21 billion. Diluted earnings per share were $0.48, down 2% from a year earlier and ahead of the $0.43 consensus. Net income was $712 million.
What Did Nike Report for Fiscal Q1 2027?
Nike reported lower revenue but a better margin: sales missed estimates while gross margin rose 60 basis points to 42.8%, above the 42.4% consensus.
The brand's mix shifted. NIKE Direct and the Sportswear franchise remain under pressure after Nike cut Dunk sales sharply, with Sportswear revenue falling at a low-double-digit rate and Jordan Brand declining at a mid-teens rate. Performance categories offset part of that, growing at a high-single-digit rate, with double-digit gains in running, global football, tennis and golf. Footwear revenue was $6.95 billion, down 6%, while apparel rose 2% to $3.38 billion. Converse fell 28% to $263 million.
North America returned to growth. Revenue there rose 2% to $5.13 billion, with wholesale up 9%. EMEA declined 5%, and Asia Pacific and Latin America were flat in local currencies.
Why Did Greater China Weigh on the Results?
Greater China was the weakest region because demand in the market continues to deteriorate. Revenue there was $1.18 billion, down 22% as reported and 26% in constant currency, with segment EBIT down 34%. It was the ninth straight quarterly decline and a worsening from the fourth quarter's 12% fall.
Management said it expects revenue in the region to weaken further over the rest of fiscal 2027 as it resets its marketplace. The reset aims to clear excess product and rebuild pricing discipline against domestic sportswear rivals, at the cost of near-term sales and profit.
What Does Nike's Full-Year Guidance Mean?
Nike now expects fiscal 2027 revenue to fall by a high-single-digit percentage, a deterioration from its earlier low-to-mid-single-digit decline outlook. Adjusted diluted EPS is guided to $1.15 to $1.35, below the $1.61 consensus and below every estimate in the compiled range. The guidance includes roughly $0.15 per share of drag from restructuring.
The company also introduced Pace, a multiyear productivity program targeting $2.5 billion of cumulative savings by fiscal 2031. It carries about $1 billion in pre-tax charges, of which roughly $300 million falls in fiscal 2027. The plan covers supply chain modernization, a geographic reorganization and a new campus in India for enterprise functions.
Tariffs remain a cost factor. Section 301 duties introduced in July 2026 apply at 12.5% to goods from China and Vietnam and at 10% to Indonesia. Vietnam accounts for about 52% of Nike's footwear production, Indonesia 27% and China 16%.
Market Reaction
The move extended a long decline. Before the report the shares were down about 45% year to date and roughly 80% below their November 2021 peak of $177.51. Investors focused on the guidance rather than the earnings beat, since the profit outlook implies a net margin near 4%, against double-digit levels in fiscal 2019 through 2024.
What Is Nike's Dividend per Share After the Guidance Cut?
Nike's quarterly dividend per share is $0.41, or $1.64 annually, a yield of about 4.7% at the pre-report price. The annual payout now exceeds the guided adjusted EPS range, so the dividend is not covered by earnings on a full-year basis. The company has raised the payout for 24 consecutive years, with the next decision expected in November. Fiscal 2026 dividends of $2.41 billion exceeded operating cash flow net of capital spending, and buybacks shrank to $123 million from $5.5 billion in fiscal 2023.
The balance sheet is adequate for now. Cash and short-term investments were $8.37 billion at the end of August against $7.89 billion of debt, $2.0 billion of which is due within a year.
Outlook
Nike's turnaround now depends on clearing legacy Sportswear inventory, stabilizing China and executing Pace while tariffs press on margins. North America and the performance categories show recovery, but they have not yet offset the declines elsewhere. The next checkpoints are an investor day on November 16 and 17, the dividend decision in November and second-quarter results in mid-December.
Mentioned tickers: NKE
