Nike Q1 2026 Earnings Review
Nike shares dropped 9% in after-hours trading Thursday after CEO Elliott Hill warned that turning around Nike Sportswear, Jordan Brand, and Greater China would take time. The company’s full-year outlook also fell short of Wall Street’s expectations.
Nike’s fiscal first-quarter earnings came in at $0.48 per share, beating analysts’ forecast of $0.43. Revenue fell 4% year over year to $11.2 billion, just below the consensus estimate of about $11.3 billion.
Key Takeaways:
Revenue missed expectations: Nike reported first-quarter revenue of $11.2 billion, below the $11.3 billion consensus, with declines in Greater China, Europe, the Middle East, and Africa.
Earnings slightly beat forecasts but slipped year over year: Earnings per share were $0.48, above expectations but down from $0.49 a year earlier.
Nike expects a weaker fiscal 2027: The company forecast revenue to decline by a high-single-digit percentage.
Layoffs are planned: Nike’s Nike Pace cost-reduction and operating-model program will include workforce changes. CEO Elliott Hill said affected-position decisions will begin in calendar 2027 and continue afterward.
The turnaround faces broader challenges: Shares are down 76% from their 2021 peak, while Nike has lost ground to competitors and faced sustained weakness in China. The company has also changed its sales-channel strategy, including reducing ties with some retailers and e-commerce companies.
Nike’s Outlook Pushes Turnaround Further Down the Road
Nike CFO Dave Denton said operating profit is likely to fall more sharply than revenue in fiscal 2027, with supply cuts expected to weigh on sales through the rest of the year and into fiscal 2028. He also cited a roughly 4-percentage-point headwind for the second quarter, reflecting last year’s promotions in Europe and heavier wholesale shipments in North America.
On his first earnings call, Denton called the forecast an initial assessment based on his first few weeks at the company and said Nike would provide an update at its November investor day. He stressed that turnaround efforts are already underway: “We are not at a standing start. Significant and valuable work has already been done.”
Nike Scales Back Inventory to Rebuild Consumer Demand
Nike CEO Elliott Hill said the company’s performance business is growing, but it is not yet strong enough to offset declines in sportswear, Jordan Brand, and China.
Nike Sportswear, which makes up just under half of quarterly revenue, recorded a low-double-digit sales decline. Cutting Dunk sales by nearly 50% reduced quarterly revenue by about $200 million, while older sportswear styles sold more slowly than expected. Jordan Brand, which represents 13% of the business, saw sales fall at a mid-teens rate. Hill said Nike had leaned too heavily on retro shoes and would scale back the volume and frequency of launches. “When consumers see the Jumpman, it should feel special. It should feel earned,” he said.
Sales in Greater China fell 26% on a currency-neutral basis. Nike is withdrawing products from discount channels and focusing digital sales on its flagship storefronts on Tmall, JD.com, and Douyin. Hill said the cleanup will take several seasons.
Nike’s Growth Is not Enough as It Launches a $2.5 Billion Reset
Nike’s performance portfolio brought in $16 billion in sales last year and grew at a high single-digit rate in the latest quarter. Running sales climbed by double digits, and Nike said its share of the max-cushion shoe market has nearly tripled. Football sales also rose strongly across every region, while World Cup team-kit sales doubled from 2022. Training, tennis, and golf each posted double-digit growth.
The company expects its reset plan to generate about $2.5 billion in savings, mainly in fiscal 2029 and 2030. The effort is expected to cost around $1 billion, in addition to the $300 million in severance costs already recorded.
Nike is also opening a campus in Bengaluru, India, and combining its four geographic divisions into three. North America will be paired with Latin America, and Asia-Pacific with Greater China. The company plans to reduce roles over time, with the new structure targeted for fiscal 2028.
SHARIAH Compliance Metrics
NKE qualifies all three Musaffa Shariah screening parameters based on AAOIFI methodology as of October 2026.
Business Activity 99.11% Halal, Doubtful is 0.11%, and non-Halal is 0.78%.
Interest-bearing securities and assets = 7.78% (Shariah-complaint is < 30%).
Interest-bearing debt = 6.84% (Shariah-complaint is < 30%).
https://musaffa.com/stock/NKE/ a more detailed view.