I last wrote about Nike (NKE) as the Bear of the Day in early July when shares were trading $44. Here's was my intro...
Nike shares continue to slide for one primary reason which the Zacks Rank has warned investors about for the past two years: persistent downward EPS estimate revisions by Wall Street analysts.
In just the past few months the consensus EPS estimate for FY 2027 (ends May) has declined by 20% from $2.00 to $1.80. And even next fiscal year is seeing the same revision trend, dropping over 10% from $2.70 to $2.40.
The profit collapse persists as revenues also fall flat. The current fiscal year Zacks consensus estimate for Nike's top line now sits at $46.32 billion among 13 analysts. This would represent slight negative growth from the prior year's sales of $46.4B.
What's Changed?
Not much. After another quarterly disappointment Thursday, NKE shares have slipped yet again to multi-year lows near $32.
The OG athletic shoe company (the 2023 film Air with Matt Damon and Viola Davis as MJ's mom is awesome!) actually beat on earnings thanks to margins, but the $11.2 billion revenue haul was over 4% lower vs last year. You can read more about that here...
NIKE Q1 Earnings Beat on Margin Gain, Stock Falls on Revenue Miss
Meanwhile, analysts are busy lowering all their estimates and price targets. So far, the EPS consensus for full-year FY 2027 (ends May) has dropped from $1.67 to $1.61, representing annual growth of just 1.9%. It's likely this will fall further as more analyst estimate revisions roll in next week.
NIKE management used its fiscal first-quarter 2027 earnings call to reinforce a two-track story: performance categories are gaining traction, while Sportswear, Jordan Brand and Greater China remain under pressure. CEO Elliott Hill said the company is prioritizing marketplace health over near-term volume.
CFO David Denton also introduced a clearer financial framework, including full-year guidance and a multiyear cost program, while warning that restructuring pressure will extend into fiscal 2028. You can read more about their outlook and initiatives in this article...
NKE Q1 Earnings Call Flags Deeper Reset Before Recovery
Bottom line: It seems all dynasties eventually decline and fall. While Nike is not going out of business any time soon, they do have to reinvent for new consumers, tastes, and commerce channels around the globe. Apple CEO Tim Cook famously bought NKE shares on a dip under $60 in December I believe. His shares may not see daylight for a few more quarters. The Zacks Rank will let us know.
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NIKE, Inc. (NKE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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