A profit beat was supposed to steady Nike. It did not. NIKE, Inc. reported revenue of $11,213 million for the quarter ended 31 August 2026, down 4% as reported and 5% currency-neutral, in the release it furnished to the SEC on 1 October 2026. Diluted earnings were $0.48 a share, ahead of the $0.43 LSEG consensus, and gross margin rose 60 basis points to 42.8%. On 2 October 2026, the first full regular session after that release, NKE closed at $33.87, down 3.64% from $35.15. The figure that matters for a desk is not that five-cent beat. Nike guided fiscal 2027 revenue down in the high single digits and adjusted diluted earnings of $1.15 to $1.35, against diluted earnings of $2.10 in the year ended 31 May 2026. Greater China fell 26% currency-neutral, and Nike Direct fell 8%. The mix and the guide overwhelmed the quarter.
Having put the 8-K next to the call, the number I would not underwrite is a run-rate $0.48. Earnings before interest and taxes were $907 million, against $904 million a year earlier, a 0% change in Nike’s table. Net income fell 2% to $712 million because the tax rate rose to 22.7% from 21.1% on foreign tax audit settlements. If this quarter is close to clean of the Pace charge, the adjusted full-year range of $1.15 to $1.35 leaves about $0.67 to $0.87 for the next three quarters combined, roughly $0.22 to $0.29 a quarter, against the $0.48 just printed. Nike did not say how much of the $0.15 exclusion sits in the first quarter, so that split is desk math, not guidance. The direction is clear. The rest of the year is supposed to earn less, while Nike discounts through sportswear, cuts Jordan retros, and lets China get worse.
Key facts
- Revenue was $11,213 million, down 4% reported and 5% currency-neutral from $11,720 million, versus an LSEG consensus of $11.32 billion. The miss is about $107 million. — Nike Exhibit 99.1, 1 October 2026; Newsmax, 1 October 2026.
- Diluted earnings were $0.48, versus $0.49 a year earlier and a $0.43 LSEG estimate. Net income was $712 million, down 2% from $727 million. EBIT was flat at $907 million. — Nike Exhibit 99.1, 1 October 2026; Newsmax, 1 October 2026.
- Gross margin was 42.8%, up 60 basis points from 42.2%, primarily on lower warehousing and logistics costs. — Nike Exhibit 99.1, 1 October 2026.
- Nike Direct was $4,142 million, down 8% reported and 9% currency-neutral, with Nike Brand Digital down 13%. Wholesale was $6,804 million, down 1%. — Nike Exhibit 99.1, 1 October 2026.
- Greater China revenue was $1,180 million, down 22% reported and 26% currency-neutral. China EBIT was $248 million, down 34% from $377 million. — Nike Exhibit 99.1, 1 October 2026.
- Fiscal 2027 guidance: revenue down high single digits, and adjusted diluted earnings of $1.15 to $1.35 excluding about $0.15 of Pace charges. Fiscal 2026 diluted earnings were $2.10. — Nike Exhibit 99.1, 1 October 2026; Nike Form 10-K, filed 15 July 2026.
- NKE’s regular-session close on 2 October 2026 was $33.87, down 3.64% from $35.15. The low was $31.97, 9.05% under that prior close. — Nasdaq historical prices, pulled 3 October 2026.
The quarter beat a bar Nike had already lowered
Fiscal 2027 is the year ending 31 May 2027, so this is not a calendar-year first quarter. Revenue of $11,213 million was 4% below $11,720 million. Nike’s narrative rounded that to $11.2 billion. Use the table. Currency-neutral sales fell 5%, so translation flattered the headline by about a point. The LSEG consensus Newsmax reported was $11.32 billion. A miss of about $107 million is under 1% of the estimate. That is not why the stock repriced.
Gross profit fell 3% to $4,798 million even as the margin rose from 42.2% to 42.8%. Cost of sales fell 5% to $6,415 million, faster than revenue. The 1 October exhibit credits lower warehousing and logistics costs. On the call, David Denton added the offset: discounts and channel mix gave some of the gain back. A 60 basis point increase is a cost result, not pricing power.
EBIT was flat, $907 million against $904 million. Selling and administrative expense declined 3% to $3,910 million and still took 34.9% of revenue, versus 34.3%, because sales fell faster. Tax rose to $209 million from $195 million, and the rate to 22.7% from 21.1% on foreign tax audit settlements. That tax line is why net income fell from $727 million to $712 million. Diluted earnings slipped from $0.49 to $0.48.
The growth that exists is narrow. North America was $5,127 million, up 2%, only because wholesale there rose 9% to $2,981 million while Nike Direct there fell 6% to $2,146 million. EMEA fell 5% to $3,176 million. Footwear fell 6% to $6,951 million, and apparel rose 2%. Globally, wholesale eased 1% and Nike Direct fell 8%, with digital down 13% and owned stores down 5%. Converse fell 28% to $263 million.
Greater China is one row with two percentages. Revenue was $1,180 million, down 22% reported and 26% currency-neutral. China wholesale was down 31% currency-neutral, and China EBIT fell 34% to $248 million. A wire that printed only −22% dropped Nike’s currency-neutral column. Inventories fell 3% to $7,846 million. Cash and short-term investments were $8.4 billion. Current debt of $2,000 million, against none a year earlier, lines up with long-term debt falling from $7,996 million to $5,893 million. That is a maturity, not new leverage. FinanceFeeds has already set out the bull and bear cases on this print. Flat EBIT and the lower year are what change a hedge.
Quick take. Revenue missed by about $107 million. Earnings beat by five cents and still fell from last year. Operating profit did not grow. Tax, digital, and China did the work the headline beat did not.
“We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management,” David Denton said in the 1 October release. Consistent with Nike’s plan is not the same as consistent with the multiple.
What Nike says it will do: fewer roles, cleaner wholesale, a smaller China
The response is called Pace. Item 2.05 of the 1 October 8-K says it includes the March 2026 cost plan. Nike expects about $1.0 billion of pre-tax charges, mostly severance, on top of about $0.3 billion already recognized in fiscal 2026. About $0.3 billion of that is slated for fiscal 2027, with the rest through fiscal 2031, and most of it cash. Cumulative savings are about $2.5 billion through fiscal 2031, before charges and before reinvestment. Adjusted earnings of $1.15 to $1.35 exclude about $0.15 of Pace cost this year. Denton said the savings are weighted to fiscal 2029 and 2030. Pace is not a fiscal 2027 margin rescue.
Elliott Hill said on the 1 October call that Nike will go to three geographies in fiscal 2028: the Americas, a combined Asia Pacific and Greater China, and EMEA as it is. The plan also adds a campus in India. None of that lifts second-quarter revenue.
“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty. I don’t take that lightly,” Hill wrote to employees, Newsmax reported on 1 October 2026, citing a letter CNBC obtained. He told analysts the same thing: over time, the changes reduce the number of roles. A Quartz report carried by Yahoo Finance said Nike has not set the headcount.
The commercial cuts hit sales first. Hill said sportswear, just under half of quarterly revenue, was down low double digits, and that aged footwear missed, so Nike is working wholesale orders down to clear it. Jordan goes back to scarcity, with fewer retro launches, including the Air Jordan 1. Denton said sportswear and Jordan together were a high-single-digit drag on the company. In China, Hill is cutting doors that deep-discount the brand and anchoring digital on fewer flagships on Tmall, JD, and Douyin, plus Nike.com and the app. He said that cleanup takes multiple seasons. Denton then said the fiscal 2027 range assumes China revenue gets worse from here for the rest of the year. He also flagged a roughly 400 basis point revenue headwind in the second quarter from the EMEA Cyber Week lap and a harder North America sell-in compare.
What is working is still too small. Hill said performance grew at a high-single-digit rate, on top of a fiscal 2026 performance business of $16 billion. Running, global football, tennis, and golf grew double digits. North America’s 2% was that business. It did not cover the hole.
Quick take. Wholesale is being asked to hold the franchise while Nike cuts units, cuts discounting doors in China, and cuts roles. The savings wait until fiscal 2029 and 2030. The sales damage is this year.
“Despite that progress, our NIKE Performance business is not yet large enough to offset the pressure we’re seeing in NIKE Sportswear, Jordan Brand and Greater China,” Hill said on the call.
Why the close was 3.64%, not the low
The release is dated 1 October 2026, and the call started at about 2:00 p.m. Pacific, the cash close in New York. Nasdaq shows that session closed at $35.15 on 112,413,500 shares. The session to mark is 2 October.
On 2 October, NKE opened at $32.553, traded from $31.97 to $33.97, and closed at $33.87 on 142,717,000 shares, in the Nasdaq history pulled on 3 October 2026. From $35.15, the open was down 7.39%, the low was down 9.05%, and the close was down 3.64%. At the close, that volume is about $4.83 billion of stock, close times shares, not a volume-weighted price. Newsmax said the shares were roughly 3% lower in extended trading on 1 October. Prices near $32 were Friday’s regular session, the open and the low. They are not the settlement.
A “plunge of nearly 9%,” or a shorthand “about 6%,” is not the close. Nine percent is the distance from $35.15 to the $31.97 low. Six percent is not the open, the low, or the close. Marking the low overstates the one-day move by a little more than five points. For a broker, the close is $33.87, down $1.28.
The gap extended a slide already underway. From the 1 July close of $43.06, the shares were down 21.3%. From the 2 January 2026 close of $63.28, $33.87 is down 46.5%. Nike also left the S&P 100 on 21 September, a mechanical seller FinanceFeeds has already described in what the exit changes and why index funds had to sell. The 21 September close was $36.10. Those flows and this guide are different trades, and they stack. Volume jumped from 38,151,670 shares on 30 September to 142.7 million on 2 October. That is the year being repriced, not a five-cent beat.
Quick take. Mark $33.87 and −3.64%. Use $31.97 only as the intraday low. The decline from January, and the September index exit, were already in the tape.
The tension a desk has to underwrite
Nike is pulling the numbers in two directions. It wants a fuller-price marketplace, and it has told investors reported revenue will look worse while that cleanup runs. Denton said supply will keep coming out of sportswear, Jordan, and China through fiscal 2027 and into fiscal 2028. Those are unit cuts by design. Treating the high-single-digit revenue guide as a demand forecast, rather than a cleanup forecast, will misfire if Nike does what it said.
Margin has the same split. The exhibit’s 60 basis point increase is mostly warehouse and logistics cost. The call says discounts and mix offset part of it, and that discounts continue. Direct fell faster than wholesale. A higher margin in a quarter that tilted toward wholesale is not proof that promotions are over. Denton declined a full-year margin number.
| Quarter ended 31 August 2026 | Revenue | Reported | Currency-neutral |
|---|---|---|---|
| North America | $5,127 million | +2% | +2% |
| Europe, Middle East and Africa | $3,176 million | −5% | −5% |
| Greater China | $1,180 million | −22% | −26% |
| Asia Pacific and Latin America | $1,463 million | −2% | 0% |
| Converse | $263 million | −28% | −28% |
| NIKE, Inc. total | $11,213 million | −4% | −5% |
| Nike Brand wholesale | $6,804 million | −1% | −1% |
| Nike Direct | $4,142 million | −8% | −9% |
Source: Nike Exhibit 99.1, 1 October 2026.
Nike published adjusted diluted earnings of $1.15 to $1.35, not a GAAP range, excluding about $0.15 of Pace charges. Subtracting that $0.15 implies GAAP earnings near $1.00 to $1.20. That is arithmetic off the bridge, which is why the two ranges both circulate. Fiscal 2026 diluted earnings were $2.10, per the 10-K filed 15 July 2026. The top of the adjusted range is about 36% below that $2.10.
Four quarters at the new $0.41 dividend are $1.64 a share, above the entire adjusted range, about 121% of $1.35 and about 143% of $1.15. Denton told Michael Binetti of Evercore ISI that “under all scenarios, we have support for maintaining and ultimately growing the dividend over time.” Cash of $8.4 billion can fund a payout the guide does not cover. That is a balance-sheet choice, next to a $2.0 billion maturity that is now current. Lululemon’s guide cut was treated the same way. The market traded the year, not the quarter.
Quick take. Full-price health and reported growth oppose each other until the cleanup ends. Adjusted $1.15 to $1.35 is the guide. A $1.64 dividend does not fit inside it.
What happens next
Three paths follow from what Nike said.
The second quarter should compare worse than the full-year high-single-digit decline. Denton put about 400 basis points of headwind on that quarter from EMEA’s Cyber Week lap and North American sell-in. China getting worse works against any easier back half. The base case is that the second quarter is the harsh one, not the turn.
Greater China is guided, in substance, to drag more over the rest of fiscal 2027 than the first quarter’s 26% currency-neutral drop. That is Denton’s line. Hill’s running streak and the Shanghai flagship can grow while the region shrinks. Marking China “down 22% and stabilizing” uses the reported column and skips both the currency-neutral figure and the forward comment.
Another earnings beat will not re-rate the stock unless Investor Day in November lifts the range or dates a path back through fiscal 2026’s $2.10. Hill did not give a day in November. Until then the market has a high-single-digit sales decline, an adjusted range about 36% below last year at the top, a role cut with no headcount, and a dividend the guide does not cover. The $33.87 close is 46.5% under the 2 January 2026 close of $63.28. North American wholesale, up 9% and also the channel clearing sportswear, is the swing factor. If those orders roll over while China is still being cut, the full-year decline stops being the conservative case. Hill has already said performance is not big enough yet.
FAQ
What revenue did Nike report for fiscal Q1 2027?
Nike reported $11,213 million for the quarter ended 31 August 2026, down 4% from $11,720 million and down 5% currency-neutral, in the 1 October release. The narrative rounded that to $11.2 billion. Newsmax reported an LSEG consensus of $11.32 billion, a miss of about $107 million. Fiscal 2027 is the year ending 31 May 2027, not the calendar year.
Did Nike beat earnings expectations even though the stock fell?
Yes. Diluted earnings were $0.48, above the $0.43 LSEG estimate and below last year’s $0.49. Net income was $712 million, down 2%, and EBIT was flat at $907 million. The beat is against the Street, not against last year. It sits inside a full-year adjusted guide of $1.15 to $1.35, which, with China and Nike Direct, is what the 2 October session traded.
How much did NKE stock fall on 2 October 2026?
NKE closed at $33.87, down 3.64% from the 1 October close of $35.15, on Nasdaq’s tape. The session opened at $32.553 and traded to $31.97, 9.05% under the prior close, before recovering. “About 6%” matches neither the close nor the low. The regular-session close is the settlement to use.
Did Greater China fall 22% or 26%?
Both figures are in Nike’s table. Greater China revenue was $1,180 million, down 22% as reported and 26% excluding currency. Translation made the reported drop look smaller. On the call, the CFO said the fiscal 2027 guide assumes China revenue gets worse from here for the rest of the year.
What earnings did Nike guide for fiscal 2027?
Nike expects a high-single-digit revenue decline and adjusted diluted earnings of $1.15 to $1.35, excluding about $0.15 of Pace charges. It did not publish a GAAP range. Fiscal 2026 diluted earnings were $2.10. Subtracting the $0.15 implies about $1.00 to $1.20 of GAAP earnings. That is arithmetic off Nike’s bridge, not a printed GAAP outlook.
What is Pace, and does it mean fewer Nike jobs?
Pace is the program in Item 2.05 of the 1 October 8-K. It builds on a March 2026 cost plan, with about $2.5 billion of cumulative savings through fiscal 2031 and about $1.0 billion of pre-tax charges, plus about $0.3 billion of severance already taken in fiscal 2026. About $0.3 billion of charges fall in fiscal 2027. Elliott Hill told employees the work means fewer roles. Nike has not given a headcount.