Nike Stock Near 52-Week Low Amid Mixed Results and Turnaround Hopes
Nike (NKE) investors hoped its fiscal first-quarter results would show clear signs of a turnaround, but the report painted a mixed picture. While margins improved, sales weakened, and the company issued a cautious outlook. These concerns pushed NKE stock to around $33 per share, nearing its 52-week low of $31.97, and marking a nearly 50% decline in 2026.
The quarterly results showed revenue of $11.21 billion, down 4% year over year and below estimates. Earnings per share were $0.48, slightly ahead of expectations but down from the previous year. Gross margins expanded by 60 basis points to 42.8%. However, Nike Direct revenue fell 8%, including a 13% drop in digital sales, and Greater China revenue plunged 26%. The company also expects fiscal 2027 revenue to decline at a high-single-digit rate, with adjusted earnings between $1.15 and $1.35 per share.
One bright spot is Nike's dividend, which yields nearly 5% at current prices. The company has raised its dividend for 24 consecutive years, making it close to achieving Dividend Aristocrat status. While the payout appears defensible, operating cash flow was only $135 million in Q1, with $610 million spent on dividends. Nike's cash position has declined sharply in recent years due to heavy investments in digital infrastructure and marketing.
A potential boost for Nike comes from its partnership with WNBA superstar Caitlin Clark. The launch of her signature basketball shoe sold out quickly, highlighting her commercial appeal. This partnership could help Nike connect with a younger generation of consumers and restore some of the excitement historically associated with the brand.