Nike (NYSE:NKE) shares fell nearly 9% in pre-market trading on Friday after the sportswear company reported fiscal first-quarter revenue below market expectations and forecast a high-single-digit revenue decline for fiscal 2027.
Nike reported adjusted earnings of $0.48 per share, above Wall Street expectations of $0.44. Revenue was $11.21 billion, compared with estimates of $11.35 billion, and declined 5% year over year on a currency-neutral basis.
Revenue declined in Greater China and the Europe, Middle East and Africa region, while Nike Direct revenue fell 8%.
“We are not ready to call a bottom yet with shares trading at 28x P/E at the midpoint of FY27E guidance,” Stifel analysts said in a note.
Gross Margin Rises to 42.8%
Nike’s gross margin increased by 60 basis points to 42.8%, primarily reflecting lower warehousing and logistics costs.
The company expects revenue to decline by a high-single-digit percentage in fiscal 2027. Adjusted earnings per share are forecast at $1.15 to $1.35, excluding approximately $0.15 per share of restructuring expenses.
The outlook remains prospective and will depend on the company’s operating performance and market conditions during the financial year.
Nike Targets $2.5 Billion in Savings Through Fiscal 2031
Nike is also implementing a restructuring programme under its Pace operating model, which the company expects to generate approximately $2.5 billion in cumulative savings through fiscal 2031.
The programme includes supply-chain changes, a new campus in India and a reorganisation of the business around three geographic regions.
Nike expects approximately $1 billion in pretax charges associated with the programme through fiscal 2031, including around $300 million during fiscal 2027.
Chief Executive Elliott Hill said the company’s “Sport Offense” strategy is producing measurable progress in its performance business, while acknowledging that further work is required in Sportswear, Jordan Brand and Greater China.
Short interest in Nike stood above 7% of the company’s publicly available shares, according to the supplied information.
