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NIKE (NKE) Q1 FY27 earnings call: guidance and Q&A

Earnings call· Aug 2026 (Q1 FY27)· Consumer Discretionary· Oct 1, 2026

Source: earnings call transcript

Executive summary

NIKE, Inc. Q1 FY27 — Performance momentum offset by a deeper portfolio reset

NIKE's turnaround is increasingly bifurcated: performance innovation and sport-led execution are working, while lifestyle, Jordan and China require deeper supply and marketplace resets. Management is accepting near-term revenue and margin pressure while redesigning the operating model to restore premium positioning and long-term profitability.

Highlights

5

  • NIKE Performance grew high single digits in Q1 after reaching $16B and growing mid-single digits in FY26.

  • Gross margin improved 60 basis points to 42.8%, helped by supply-chain cost management and FX.

  • NIKE has nearly tripled its Max Cushioning running-category share over the past year.

  • World Cup team-kit sales doubled versus the 2022 tournament, while club football kits grew high teens.

  • NIKE ended the quarter with $8.4B of cash and short-term investments and approximately 2x leverage.

Concerns

5

  • Greater China revenue fell 26%, and management expects the decline to worsen over the balance of FY27 as the digital and marketplace reset continues.

  • NIKE Sportswear, just under half of quarterly revenue, declined low double digits; the planned reduction in dock revenue produced an approximately $200M headwind.

  • Jordan Brand represented 13% of global business and declined by the mid-teens as excess Retro supply pressured marketplace health.

  • FY27 revenue is expected to decline at a high-single-digit rate, with deliberate supply reductions pressuring results into FY28.

  • Q2 revenue growth faces an approximately 400-basis-point headwind from EMEA Cyber Week and North America sell-in comparisons.

Guidance & targets

CategoryTargetConfidence
Full-year revenue
Decline in the high-single-digit range
high materiality
High
Revenue pressure from portfolio actions
Continued revenue pressure
high materiality
High
Greater China revenue
Worse revenue performance than Q1
high materiality
High
Second-quarter revenue comparison headwind
Approximately 400 basis points of revenue headwind
high materiality
High
Full-year EBIT
Decline by a greater percentage than revenue
high materiality
High
Full-year SG&A
Down year over year
high materiality
High
Adjusted EPS
$1.15-$1.35
high materiality
High
Pace impact on adjusted EPS
Approximately $0.15 per share
medium materiality
High
Pace program savings
Approximately $2.5B
high materiality
High
Pace savings realization
Majority of savings realized
high materiality
High
Pace implementation cost
Approximately $1B over the program life
high materiality
High
Geographic operating-model transition
Move to three-geography formation
medium materiality
High
Basketball momentum
Continue momentum
low materiality
Medium
Dividend policy
Maintain and ultimately grow the dividend
medium materiality
Medium
Long-term financial algorithm disclosure
Provide a five-year financial algorithm
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
North America
Growth was driven by Running, Global Football and Basketball, with good performance-product sell-through across sporting goods, athletic specialty and specialty accounts.
—Up 2% currency neutral——
EMEA
The region faces a difficult Cyber Week comparison in Q2.
—Down 5% currency neutral——
APLA
Performance was flat in the quarter.
—Flat currency neutral——
Greater China
The digital and physical-marketplace reset pressured results; management expects revenue performance to worsen during the rest of FY27.
Running growth: Double digitsRunning growth streak: 6 quartersChina After Dark Tour registrations: Almost 4,000 runners
—Down 26% currency neutral—Profitability pressured; no amount stated
NIKE Performance
Growth was broad-based across key sports and benefited from World Cup activity. Excluding the Greater China reset, growth would have been low double digits.
FY26 portfolio size: $16BFY26 growth: Mid-single digitsGrowth excluding Greater China reset: Low double digits
—Up high single digits currency neutral——
NIKE Sportswear
Deliberate supply reductions, product underperformance and marketplace pressure drove the decline; future order books were affected by excess inventory cleanup.
Revenue mix: Just under half of Q1 revenueDock revenue reduction: Nearly 50%Dock reduction headwind: Approximately $200MScaled footwear franchise growth: Strong double digits
—Down low double digits currency neutral——
Jordan Brand
NIKE is reducing the volume and frequency of specific Retro launches to restore scarcity and marketplace health.
Global business mix: 13%
—Down mid-teens currency neutral——
Running
Max Cushioning innovation and the [ Vomero ] franchise were key drivers.
Max Cushioning market share change: Nearly tripled over the past year
—Up double digits currency neutral——
Global Football
World Cup energy drove broad geographic growth and helped refresh the football marketplace.
World Cup team kit sales: 2x versus 2022Club football kit growth: High teens
—Strong double-digit growth in all 4 geographies——
Basketball
Women's signatures and broader performance footwear supported momentum.
Women's signature business growth: Nearly 500% from FY22 to FY26Caitlin 1 launch distribution: 5,000 doors
—Up double digits currency neutral in North America——
Tennis and Golf
Both sports contributed to Performance portfolio growth.
—Up double digits currency neutral——

NKE operating KPIs by quarter

NKE operating KPIs stated on its earnings calls, by fiscal quarter
KPI Aug 2025 Q1 FY26 Nov 2025 Q2 FY26Change vs prior quarter
Stores China
5,000+ With over 5,000 mono-brand stores in China, this will take investment, and it will take time. Source: earnings call transcript
5,000 As you know, it's a mono-brand marketplace with thousands of -- 5,000 doors with the teams working the presentation of our product at retail and we weren't making the investment in our store fleet, so our stores aren't compelling. Source: earnings call transcript
—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
Studio Fleetslaunch
Solar Freezelaunch
[ Pegasus plus 2 ]launch
[ Alphafly 4 ]launch
[ Swoosh Fly ]launch
NIKE Apexlaunch
NIKE Hybrid Footwear Systemlaunch
Hyper Slidelaunch
Caitlin 1launch
[ Shishu ]launch
Made-for-China collectionlaunch

Deals & partnerships

University of Texas Existing university athletics and campus-marketing partnership.

NIKE activated Running, Training, Football and Sportswear around the Texas–Ohio State game, including athlete experiences, customized products and a campus pop-up.

Ohio State University Existing university athletics partnership.

Named as a university partner that NIKE can activate through its broader Sport Offense model.

University of Miami University athletics partnership and planned activation.

Named as an upcoming football-market activation under NIKE's university partnership strategy.

German Football Association Football federation sponsorship and product partnership.

Management referenced an upcoming association partnership as part of NIKE's Global Football opportunity.

FC Barcelona Football club sponsorship and product partnership.

Named as an existing Global Football partnership supporting NIKE's ability to surround major consumer moments.

Paris [ Germane ] Football club sponsorship and product partnership.

Named as an existing Global Football partnership. Counterparty name is garbled in the transcript and is retained verbatim.

[ NIKE Times Hyperised ] Recovery-footwear innovation partnership.

Management said the partnership produced the new hyper slide recovery product. The counterparty/partnership label is garbled and retained verbatim.

[ Embape ] Athlete endorsement relationship. More than 2 decades

Management confirmed that the athlete is leaving NIKE's football roster after a relationship lasting more than 2 decades; the name is retained verbatim because of ASR uncertainty.

Risks & headwinds

Sportswear weakness and excess marketplace inventory Remainder of FY27 into FY28

Sportswear was just under half of Q1 revenue and declined low double digits; the dock reduction created an approximately $200M headwind.

Mitigation:Reduce supply, segment Sportswear around distinct consumers, introduce differentiated assortments and work with wholesale partners to clear excess inventory.

Jordan Retro oversupply Near term, with the largest impact in North America

Jordan represented 13% of global business and revenue declined by the mid-teens.

Mitigation:Reduce the volume and frequency of specific Retro launches and restore scarcity.

Greater China marketplace reset and brand pressure Multiple seasons; expected to worsen over the balance of FY27

Greater China revenue declined 26%; most partner physical doors have not been refreshed in seven years.

Mitigation:Eliminate lower-quality online distribution, concentrate digital storefronts, refresh partner doors and increase locally created product.

Gross-margin pressure and fixed-cost deleverage FY27

FY27 EBIT is expected to decline by a greater percentage than revenue.

Mitigation:Use sourcing and supply-chain savings, inventory management and stronger full-price realization while maintaining expense discipline.

Discounting and adverse channel mix FY27

Gross margin was 42.8%, up 60 bps, but increased discounts and channel mix remained offsets.

Mitigation:Supply-chain and sourcing programs are intended to offset part of the pressure.

Deliberate portfolio-reset revenue contraction FY27 into FY28

FY27 revenue is expected to decline at a high-single-digit rate.

Mitigation:Management is deliberately reducing supply to improve revenue quality and full-price realization.

Difficult second-quarter comparisons Q2 FY27

Approximately 400 bps of Q2 revenue headwind from EMEA Cyber Week and North America sell-in comparisons.

Mitigation:No discrete mitigation was given beyond managing the reset and focusing on higher-quality revenue.

Pace execution cost and workforce disruption Through FY31

Approximately $1B of implementation cost over the program life, in addition to approximately $300M of FY26 severance costs.

Mitigation:Pace is intended to simplify operations, move decisions closer to markets and reinvest part of its savings in high-return priorities.

What to watch in Q2 FY27

Greater China reset cadence

next quarter
Current Greater China revenue down 26% in Q1 FY27
Target Evidence of the expected further deterioration and progress reducing digital discounting

Why it matters

China is a major earnings and brand-health pressure point, and the reset is expected to intensify before improving.

assumes that China actually gets worse from a revenue perspective for the balance of this year

Find out whether NKE delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked for the relative scale and drivers of Performance versus Sportswear/Jordan in North America and the CFO's confidence in guidance.

Management quantified Performance growth and identified Running, Global Football and Basketball as North America drivers, but did not provide the requested U.S. portfolio sizes. Denton said the outlook followed a bottom-up review and was pressure-tested.

“So I sit here today feeling very confident”

asked by Simeon Siegel · answered by Elliott Hill and David Denton

2 min read 7 chapters

Detailed narrative

Sport Offense and performance momentum

The Sport Offense is producing broad performance-category momentum, with innovation and country-level execution working together across product, marketing and marketplace. Management emphasized that the approach is succeeding through sporting-goods, athletic-specialty and specialty accounts rather than through one channel alone. Performance, however, is still too small to offset the lifestyle reset.

Sportswear and Jordan marketplace reset

Sportswear is being reorganized around narrower consumer segments after management acknowledged that it had underestimated the complexity of the business. The company is reducing aged and high-volume supply, introducing differentiated assortments and rebuilding franchise energy. Wholesale order books have already been affected as NIKE and partners work through excess inventory.

Jordan scarcity and brand dimensionalization

Jordan is returning to the scarcity model for iconic Retro footwear, with lower launch volume and frequency intended to restore marketplace balance. North America will experience the largest near-term effect. Management also plans to broaden Jordan through cleated footwear, golf and training so that Retro styles carry less of the burden.

Greater China repositioning

China's reset combines fewer digital distribution points, improved flagship experiences, partner-door investment and locally created product. Management said unprofitable and brand-dilutive online distribution had been removed, while local design, development and manufacturing capabilities are being expanded. A new leadership team had been in place for six months, and management stressed that the recovery will require multiple seasons.

Pace operating-model transformation

Pace combines supply-chain redesign, a new Bengaluru capability campus, geographic simplification and workforce changes. NIKE plans to move from four geographies to three—Americas, EMEA and Asia Pacific/Greater China—while shifting resources and authority closer to countries, territories and cities. The program is intended to speed decisions, lower the cost base and fund reinvestment in consumer-facing priorities.

University and local-market activation

Management used its Austin activation as a model for locally relevant execution across NIKE's university network. The company has roughly 1,000 North American university partnerships reaching more than 13 million students; the six-day Austin program combined sport experiences, retail, NIL athletes and customized merchandise. NIKE also announced 13 new NIL athletes across eight sports during the activation.

Financial discipline and Investor Day

The new CFO described the initial outlook as the result of a bottom-up business and financial review completed over several weeks. Management framed the plan as attainable but acknowledged that current results remain below NIKE's potential. November's Investor Day is expected to connect portfolio priorities, reinvestment choices and the long-term financial model.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.