What Should Nike Stock Holders Take From Its First Quarter?

Nike (NKE) stock fell 3.6% on October 2, 2026, the first session after its Q1 FY2027 report, while the S&P 500 rose 0.7%. The fall came even though Nike earned $0.48 a share, ahead of the $0.44 analysts expected. So what did Nike say on its call that mattered more than the earnings beat?

Nike Expects A Year Of Shrinking Revenue

Management expects revenue to decline by a high-single-digit percentage in fiscal 2027. Nike started giving a full-year outlook on this call, and it included an earnings forecast. Management expects adjusted earnings of $1.15 to $1.35 a share, against analyst estimates of $1.65.

The quarter itself fell short on sales. Revenue of $11.21 billion came in 1.9% below what analysts expected. Nike stock also fell further than its peers: over the same session, G-III Apparel lost 0.7% and Tapestry lost 0.9%. The forecast, along with the revenue miss, appears to be what holders were reacting to.

How Long Does Nike Expect Sales To Keep Falling?

Nike expects the pressure on sales to last through the rest of fiscal 2027 and into fiscal 2028, management said on the Q1 FY2027 call. Nike’s revenue rose 0.2% in its last full fiscal year after falling 9.8% the year before, but the pause was short. Revenue fell 4% in the first quarter, and Nike expects a steeper fall for the full year.

Part of the decline is deliberate. Nike Sportswear, which made up just under half of quarterly revenue, was down by a low-double-digit percentage. Nike cut revenue from its Dunk line by nearly 50% on purpose, and management said tighter supply should help it sell more at full price. Greater China fell 26%, and management said its actions there will weigh on the region even more than in the first quarter.

Nike’s performance business grew by a high-single-digit percentage, but management said that business is not yet large enough to offset the rest.

What Did Nike’s Management Leave Unanswered?

Management did not say what gross margin Nike will earn on those lower sales. Asked on the call where gross margin would land for fiscal 2027, management declined to give a forecast. Gross margin was 42.8% in the first quarter, up 60 basis points from a year earlier. Supply chain cost savings and currency helped, though discounts increased in the quarter.

Profit is where holders are most exposed, since management expects operating profit to fall by a greater percentage than revenue. Nike said it will update its full-year outlook as the year progresses. Its second-quarter results are the next report where it could do so. If Nike still expects adjusted earnings of $1.15 to $1.35 a share at that report, the year is going as management planned.

Does This Mean You Should Act On NKE?

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