Nike Stock Drops Despite Earnings Beat on Bleak Revenue Forecast

Nike (NKE) stock dropped 3.6% on October 2, 2026, following its first-quarter earnings report for fiscal 2027. Despite beating earnings estimates with $0.48 per share compared to the expected $0.44, investors reacted negatively to the company's outlook. Nike anticipates a high-single-digit percentage decline in revenue for the full year, with adjusted earnings forecasted between $1.15 and $1.35 per share, significantly below analyst estimates of $1.65.

The quarter itself underwhelmed, with revenue of $11.21 billion falling 1.9% short of expectations. Nike's management attributed the decline to strategic reductions in its Dunk line by nearly 50% and a 26% drop in Greater China sales. While the performance business saw high-single-digit growth, it was not enough to offset the overall downturn.

Nike expects sales pressure to persist through fiscal 2027 and into fiscal 2028. Management also declined to provide a forecast for gross margin, which stood at 42.8% in the first quarter, up from the previous year. The company plans to update its full-year outlook in the next quarterly report, leaving investors uncertain about the path forward.

The stock's decline was steeper than peers like G-III Apparel and Tapestry, which fell 0.7% and 0.9% respectively. The combination of a revenue miss and a pessimistic forecast appears to have driven the negative market reaction.