Nike revenue falls 4% to $11.2B in first quarter

Nike reported financial results for the first quarter of fiscal 2027 ended August 31, 2026. Total revenue fell 4 percent on a reported basis and 5 percent on a currency-neutral basis to $11.2 billion. Net income decreased 2 percent to $0.7 billion, with diluted earnings per share at $0.48. Gross margin expanded 60 basis points to 42.8 percent, driven primarily by lower warehousing and logistics costs.

Nike Brand revenue stood at $11.0 billion, down 4 percent on both reported and currency-neutral terms, as declines in Greater China and EMEA outweighed growth in North America. Nike Brand wholesale revenue declined 1 percent to $6.8 billion, while Nike Direct revenue dropped 8 percent to $4.1 billion, pulled down by a 13 percent drop in Nike Brand Digital and a 5 percent drop in owned stores. Converse revenue fell 28 percent across all territories to $263 million.

Total selling and administrative expense fell 3 percent to $3.9 billion. Operating overhead declined 6 percent to $2.7 billion on lower wage-related costs, while demand creation rose 5 percent to $1.3 billion due to brand marketing around major sporting events. Inventories ended the period down 3 percent at $7.8 billion, and cash and equivalents along with short-term investments totaled $8.4 billion, down around $0.2 billion. Nike distributed approximately $610 million via dividends, up 3 percent from the prior year.

The company also launched Pace, an operating transformation building on its March 2026 cost plan. Pace realigns operations into three geographies, modernizes the global supply chain, establishes a new campus in India, and aims for approximately $2.5 billion in cumulative savings through fiscal 2031. Nike anticipates about $1.0 billion in pre-tax charges through fiscal 2031, including roughly $0.3 billion in fiscal 2027, on top of $0.3 billion in severance recorded in fiscal 2026.

For fiscal 2027, Nike expects full-year revenue to decline in the high-single digits and its effective tax rate to be in the mid-20 percent range. Management projected adjusted diluted earnings per share between $1.15 and $1.35, which excludes about $0.15 per share in restructuring expenses linked to Pace.