- Nike reported fiscal Q1 2027 EPS of $0.48, beating the $0.44 consensus, on revenue of $11.21 billion that missed the $11.35 billion estimate; shares fell 6.24% after hours to $32.96 and opened Friday near $32, the lowest since 2013.
- North America returned to 2% growth while Greater China revenue dropped 26%; Nike Sportswear fell low double digits and Jordan Brand declined mid-teens.
- Management guided FY27 revenue down high single digits and adjusted EPS to $1.15-$1.35, excluding about $0.15 of Pace restructuring impact, with EBIT falling by a larger percentage than revenue and pressure extending into FY28.
- Nike's $2.5 billion Pace savings program is expected to deliver most of its benefit in FY29 and FY30, and the company said it will cut more staff as part of restructuring.
- Analysts stayed negative after the print: Morgan Stanley underweight with a $27 target, Bank of America underperform at $24, Wells Fargo equal weight at $30, Goldman Sachs and Citi neutral at $30 and $32; Bernstein was the outlier at outperform with a $45 target.
- Wells Fargo's Ike Boruchow said numbers are again coming down with roughly a 25% cut to Street EPS, growth possibly two years away and valuation not cheap; several analysts are waiting for the November investor day for clarity.
- CEO Elliott Hill attributed the decline to a sea of sameness in lifestyle gear, an oversupply of retro Jordan sneakers and a struggling China segment, and said the efforts to fix them will take time.
Quotes
“It's simply hard to find good news here.”
“Numbers are again coming down (~25% cut to Street EPS), growth may be two years away and valuation isn't cheap.”
“We reiterate our Underperform as visibility on a sales turnaround remains limited.”
“The sport offense is proving itself. Pace is how we scale it.”
“The headline decline only tells part of the story.”
“While 1Q27 EPS came in above consensus expectations... we note the result 1) was supported by relatively low-quality revenue, with wholesale & apparel offsetting deeper DTC & footwear declines”