Nike Stock Slides as Revenue Miss Clouds Turnaround

Nike shares dropped sharply after the sportswear giant reported mixed fiscal first-quarter results, as better-than-expected earnings failed to outweigh weaker revenue and concerns about its ongoing turnaround.

Nike posted adjusted earnings of $0.48 per share, beating Wall Street expectations of $0.44. However, quarterly revenue reached $11.21 billion, missing analysts’ $11.35 billion estimate. Sales declined 5% on a currency-neutral basis compared with the previous year.

Weakness was spread across several important markets and sales channels. Revenue declined in Greater China and Europe, the Middle East and Africa, while Nike Direct sales fell 8%. The results highlight the challenges facing CEO Elliott Hill as he works to restore sustainable growth following years of softer demand and strategic changes.

Nike’s gross margin improved by 60 basis points to 42.8%, primarily due to lower warehousing and logistics expenses. Still, investors focused on sluggish sales and the company’s cautious outlook.

For fiscal 2027, Nike expects revenue to fall by a high-single-digit percentage. Adjusted earnings per share are projected between $1.15 and $1.35, excluding roughly $0.15 per share in restructuring costs.

Nike is also launching another significant restructuring initiative through its new Pace operating model. The company expects the program to generate approximately $2.5 billion in cumulative savings through fiscal 2031. Planned measures include supply-chain modernization, establishing a new campus in India and reorganizing operations around three geographic regions.

The restructuring is expected to generate about $1 billion in pretax charges through fiscal 2031, including approximately $300 million during fiscal 2027.

Hill said Nike’s “Sport Offense” strategy is delivering measurable improvements in its performance business but acknowledged more progress is needed in Sportswear, Jordan Brand and Greater China.

Nike stock closed at $35.15 before falling another 4.5% to $33.57 in after-hours trading. With short interest exceeding 7% of the company’s float, investors are closely watching whether Hill’s turnaround strategy can revive revenue growth in China and Nike Direct while improving profitability beyond cost reductions.