Nike Launches $1B Pace Restructuring as Q1 Revenue Falls 4% and FY27 EPS Guidance Disappoints
NKE is trading near its 52-week low of $35.02 (0.8% above the low) on elevated volume (2.7× avg).
Summary
Nike reported Q1 FY27 revenue of $11.2 billion, down 4%, and announced a $1 billion restructuring program called Pace. FY27 guidance calls for high-single-digit revenue declines and adjusted EPS of $1.15-$1.35.
Updates
· Dow Jones Newswires — Demand creation spending rose 5% on higher investment in key sports events.
· Reuters — Q1 net income was $712 million, beating estimates of $638.21 million; shares fell about 5% in extended trading.
- Q1 Results
- Q1 revenue was $11.21 billion, a slight miss versus analyst expectations.
- Q1 revenue consensus estimate was $11.32 billion from 27 analysts.
- Net income declined 2% year-over-year.
- Q1 diluted EPS was $0.48.
- Q1 gross profit was $4.80 billion.
- Q1 pretax profit was $921 million.
- Regional Performance — Revenue declines were also due to EMEA.
- Cost Management — Operating overhead fell due to reduced wage-related expenses.
- Tax Outlook — Fiscal 2027 effective tax rate is expected to be in the mid-20 percent range.
All 9 details
- Q1 revenue was $11.21 billion, a slight miss versus analyst expectations.
- Q1 revenue consensus estimate was $11.32 billion from 27 analysts.
- Net income declined 2% year-over-year.
- Fiscal 2027 effective tax rate expected in the mid-20 percent range.
- Revenue declines were also due to EMEA.
- Operating overhead fell due to reduced wage-related expenses.
- Q1 diluted EPS was $0.48.
- Q1 gross profit was $4.80 billion.
- Q1 pretax profit was $921 million.
- Q1 Results
Key Events · Earnings and Guidance · NKE
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Q1 FY27 Revenue Falls 4%
Revenue was $11.2 billion, down 4% reported and 5% currency-neutral. Greater China fell 22% and Converse fell 28%, partially offset by 2% growth in North America.
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Pace Restructuring Announced
New multi-year program expects ~$1.0 billion in pre-tax charges through fiscal 2031, primarily severance, in addition to $0.3 billion already recognized in fiscal 2026. Expected cumulative savings of ~$2.5 billion through fiscal 2031.
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FY27 Guidance Disappoints
Revenue expected to decline high-single digits in fiscal 2027. Adjusted diluted EPS guided to $1.15-$1.35, excluding ~$0.15 of Pace restructuring expenses, versus $2.80 reported in fiscal 2026.
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Gross Margin Expands 60 bps
Gross margin improved to 42.8% from 42.2%, driven by lower warehousing and logistics costs. Selling and administrative expense decreased 3% to $3.9 billion.
Analysis · NKE · Manufacturing
Nike's Q1 FY27 results show continued revenue declines across most geographies, with Greater China down 22% and Converse down 28%. The company is launching a multi-year restructuring program called Pace that will incur approximately $1.0 billion in pre-tax charges through fiscal 2031, on top of $0.3 billion already recognized in fiscal 2026. Management guided to high-single-digit revenue declines for fiscal 2027 and adjusted diluted EPS of $1.15 to $1.35, well below the $2.80 reported in fiscal 2026. The stock is trading near its 52-week low, and this filing confirms the turnaround is still in its early, costly stages.
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At the time of this filing, NKE was trading at $35.30 on NYSE in the Manufacturing sector, with a market capitalization of approximately $52.1B. The 52-week trading range was $35.02 to $76.97. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.