NIKE (NYSE:NKE) said its first-quarter fiscal 2027 results met its expectations, as growth in its performance categories was offset by continued weakness in Sportswear, Jordan Brand and Greater China. The company reported revenue of $11.2 billion, down 4% on a reported basis and 5% on a currency-neutral basis, while diluted earnings per share fell 2% to $0.48.
President and CEO Elliott Hill said the company’s performance portfolio continued to gain momentum, growing at a high-single-digit rate during the quarter after reaching $16 billion in sales in fiscal 2026. However, Hill said that business remains too small to fully counter pressure in lifestyle-oriented categories and China.
Performance categories post broad growth
Nike said running, global football, training, basketball, tennis and golf contributed to performance growth. Running increased at a double-digit rate, supported by the Vomero franchise and the company’s expansion in max-cushioning footwear. Hill said Nike has nearly tripled its share of the max-cushioning category over the past year.
The company also highlighted a series of product launches, including the Pegasus Plus Two, Alphafly Four, Swooshfly and Nike Apex. In football, Nike said World Cup-related demand helped lift sales of team kits to twice the level seen during the 2022 tournament, while club football kit sales rose at a high-teens rate.
Training grew globally, led by Europe, the Middle East and Africa. Nike said its Nike Mind franchise had quickly become one of its leading sellers, while the company introduced its Hybrid Footwear system for running and strength training. Basketball sales rose at a double-digit rate in North America, according to Hill.
Hill also pointed to women’s basketball as a growth opportunity. Nike said it launched the Caitlin One signature shoe in 5,000 doors, which it described as its largest women’s signature shoe launch. The company said its women’s basketball signature business had grown nearly 500% between fiscal 2022 and fiscal 2026.
Sportswear, Jordan and China remain pressure points
Nike Sportswear, which represented just under half of quarterly revenue, declined at a low-double-digit rate. Hill said the result reflected deliberate reductions in Dunk product, underperformance in some higher-volume footwear and broader pressure in the lifestyle marketplace.
The company reduced Dunk revenue by nearly 50% during the quarter, creating an approximately $200 million headwind in Sportswear. Nike is also working with wholesale partners to reduce excess inventory of certain aged footwear products after sell-through came in below expectations.
Hill said several Sportswear franchises continued to perform well, including Air Force One and running-inspired silhouettes such as the P-6000 and V5 RNR. Studio Fleece for women was Nike’s best-performing apparel collection of the quarter, he said.
Going forward, Nike plans to divide its Sportswear business into more focused consumer segments and create differentiated assortments, rather than relying on a small number of major franchises. “The sportswear consumer isn’t one audience,” Hill said. “It’s a collection of consumers with distinct needs, tastes, and motivations.”
Jordan Brand represented 13% of Nike’s global business during the quarter, with revenue declining at a mid-teens rate. Nike plans to reduce the volume and frequency of certain retro Jordan releases, particularly in North America, as it seeks to restore a scarcity-driven model for the brand.
In Greater China, revenue fell 26%. Nike is reducing distribution through digital channels it views as misaligned with its marketplace strategy and is concentrating its digital presence around flagship storefronts on Tmall, JD and Douyin, along with nike.com and the Nike app. The company said the reset is intended to reduce discounting and improve the premium presentation of Nike and Jordan products.
Nike said many partner retail locations in China have not been refreshed in more than seven years. Hill cited the company’s Shanghai House of Innovation, which has delivered 10 straight months of growth since shifting its focus toward sport. Still, the company expects the digital cleanup and inventory actions in China to take multiple seasons and to continue pressuring revenue and profitability in the near term.
Margins improve as Nike launches Pace program
Gross margin increased 60 basis points from the prior year to 42.8%, aided by supply-chain cost management and foreign-exchange tailwinds. Those benefits were partly offset by increased discounts and channel mix. Selling, general and administrative expenses declined 3% on a reported basis, even as the company increased demand-creation investments related to the World Cup.
North America revenue rose 2%, while EMEA revenue declined 5%, Asia Pacific and Latin America was flat, and Greater China declined 26%.
Chief Financial Officer Dave Denton, who recently joined Nike, said the company maintained a net cash position, ending the quarter with $8.4 billion in cash and short-term investments and leverage of roughly two times. Nike returned approximately $610 million to shareholders through dividends during the quarter.
Denton said the company expects to maintain and grow its dividend over time, describing it as a significant priority within Nike’s capital-allocation strategy.
Nike also introduced a multiyear productivity initiative called Pace. The company expects the program to generate approximately $2.5 billion in savings, although it expects implementation costs of about $1 billion over the program’s life, in addition to approximately $300 million of fiscal 2026 severance costs.
The initiative includes supply-chain changes, a new campus in Bengaluru, India, and a plan to reorganize into three geographies: the Americas, Asia Pacific and Greater China, and EMEA. Nike expects the new geographic structure to take effect in fiscal 2028. The company said Pace will eventually reduce the overall number of roles, while adding capabilities in certain areas.
Nike expects most Pace savings to be realized in fiscal 2029 and fiscal 2030, with full realization continuing into fiscal 2031.
Fiscal 2027 outlook calls for further pressure
For fiscal 2027, Nike expects revenue to decline at a high-single-digit percentage rate. Denton said the outlook reflects deliberate actions to reduce supply in Sportswear, Jordan Brand and Greater China in pursuit of improved full-price realization and a healthier marketplace.
The company expects those actions to pressure reported revenue for the rest of fiscal 2027 and into fiscal 2028. Nike also said second-quarter revenue faces an approximately 400-basis-point headwind from comparisons against prior-year promotional activity during Cyber Week in EMEA and stronger North American sell-in activity.
Nike expects EBIT to decline by a greater percentage than revenue, reflecting gross-margin pressure, fixed-cost deleverage and higher input costs. It expects SG&A expenses to remain below prior-year levels. Adjusted fiscal 2027 earnings per share are projected at $1.15 to $1.35, excluding an estimated $0.15 impact from the Pace program.
The company plans to provide additional details on its long-term growth algorithm, portfolio priorities and financial objectives at its Investor Day in November.
About NIKE (NYSE:NKE)
NIKE, Inc is a global sportswear company that designs, develops, markets and sells athletic footwear, apparel, equipment, accessories and related services. Its products are marketed under the NIKE, Jordan and Converse brands and are used across a broad range of sports and lifestyle activities, including running, basketball, football, training and outdoor pursuits.
The company distributes its products through a combination of wholesale partners, NIKE-owned retail stores and digital platforms.
