Nike's Turnaround Hits Speed Bump on Disappointing Guidance
Nike's turnaround efforts hit a speed bump after it reported disappointing fiscal 2027 guidance. The company beat earnings expectations but fell short on revenue, and its outlook left investors underwhelmed.
The athletic footwear and apparel giant's stock plummeted by almost 9% in after-hours trading following the release of its first-quarter earnings report. Revenue declined by 4% year-over-year to $11.21 billion, while net income fell by 2% to $712 million or $0.48 per share.
The decline in revenue was not limited to North America, with Europe, Middle East, and Africa (EMEA) experiencing a 5% drop, Asia Pacific and Latin America seeing a 2% decrease, and Greater China plummeting by 22%. The only region that showed growth was North America, but it was only 2%.
Nike's CEO, Elliott Hill, acknowledged the uncertainty created by these results in a letter to employees. He also announced operational adjustments, which will likely result in job cuts.
The company's stock price is still relatively high, with a forward P/E of over 21, making it less attractive for investors.