Nike Beats Earnings, Misses Revenue as China Reset Weighs on Shares
Nike's first-quarter fiscal 2027 earnings report beat expectations on profits but fell short of revenue forecasts, leading to a sharp decline in shares after hours. The company earned $0.48 per share, exceeding the estimated $0.44, but revenue came in at $11.21 billion, below the predicted $11.35 billion.
The gross margin improved to 42.8%, driven by supply-chain actions and lower SG&A expenses. However, North America growth was only 2%, while Greater China sales plummeted 26%. The company's performance categories, such as running, football, training, and basketball, grew in the quarter.
Nike management acknowledged that revenue pressure will continue due to deliberate changes in sportswear, Jordan Brand, and Greater China. They expect a high-single-digit decline in revenue for fiscal 2027 and warned that the effects of these resets will likely persist into fiscal 2028.