Nike shares went into the post-earnings session near $36, down about 43% this year and roughly 80% below their November 2021 record high near $179, so positioning was already defensive before the report. The revenue guidance is the likely swing factor: a full-year sales decline may outweigh the earnings beat and inventory progress for investors waiting on evidence of a turnaround. On the charts, the 100-hour moving average near $36 is the closest reference, with the 200-hour average around $37.40 the first resistance a relief rally would need to clear and hold. Above that, the 100-day average around $41 comes into view, while a move back below $36 would leave sellers firmly in control.
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Nike found a few extra cents of profit to beat the street, but a forecast for shrinking sales all year is the number that will define Elliott Hill’s turnaround story.
Summary:
- Fiscal Q1 EPS of 48 cents, above estimates of about 44 cents but just below 49 cents a year earlier
- Revenue around $11.2 billion, short of forecasts near $11.3 billion; Nike Brand revenue also missed
- Gross margin improved to 42.8% from 42.2% a year earlier
- Inventory of about $7.8 billion came in below expectations near $8 billion
- Greater China EBIT of about $250 million missed estimates of roughly $310 million
- Nike expects fiscal 2027 revenue to fall by a high-single-digit percentage, with adjusted EPS of $1.15 to $1.35
Main article:
Nike beat Wall Street’s profit forecast for its fiscal first quarter but fell short on revenue and warned that sales would shrink for the full year, a mixed result for a company whose shares are trading near their lowest level since early 2014.
The sportswear group reported earnings of 48 cents a share for the quarter ended in August, ahead of the roughly 44 cents analysts had expected but slightly below the 49 cents posted a year earlier. Revenue came in at around $11.2 billion, missing estimates of about $11.3 billion and down roughly 4% from about $11.7 billion a year ago. Nike Brand revenue, which includes Jordan, was around $11 billion, also short of forecasts.
There were some signs of tighter operations. Gross margin improved to 42.8% from 42.2% a year earlier, and inventory of about $7.8 billion came in below the roughly $8 billion analysts had pencilled in, a point that matters because leaner stock levels reduce the need for the heavy discounting that has eroded profitability.
China remained a weak spot. Earnings before interest and taxes in Greater China were about $250 million, well below expectations of roughly $310 million, underlining the difficulty Nike faces in one of its most closely watched markets.
The outlook is likely to draw the most scrutiny. Nike said it expects fiscal 2027 revenue to decline by a high-single-digit percentage and guided to adjusted earnings per share of $1.15 to $1.35 for the year.
The results are another test for chief executive Elliott Hill, a long-time Nike insider who returned to lead the company in October 2024. His strategy has centred on athlete-led performance products and rebuilding ties with wholesale partners after his predecessor leaned heavily on direct sales. In the prior quarter, wholesale revenue rose 4% while Nike Direct sales fell 7%.
The company is also leaning on new signature franchises, many of them in women’s basketball. The earnings release coincided with the global launch of the Caitlin 1, the first signature shoe for WNBA star Caitlin Clark, though sales from that launch fall into the current quarter. Competition for star athletes is intensifying too, with Kylian Mbappé ending his Nike relationship in September to join On.
Investors will look to the conference call for a clearer timetable for sales stabilisation, evidence of improvement in China and a read on underlying margins. That last point carries extra weight because the prior quarter’s earnings were lifted by a one-off benefit from tariff recoveries.
This article was written by Eamonn Sheridan at investinglive.com.