NIKE: REVENUE FELL 4.3% TO $11,213M AND EBIT HELD AT $907M; GREATER CHINA AND CONVERSE WERE $435M OF THE $507M DECLINE
By Pau Almar · Published
Q1 FY2027 · 1 OCTOBER 2026
Nike reported first-quarter revenues of $11,213m ($11,720m) for the three months to 31 August 2026, down 4% on a reported basis and down 5% currency-neutral. Gross profit was $4,798m ($4,943m), a gross margin of 42.8% (42.2%). EBIT was $907m ($904m), an EBIT margin of 8.1% (7.7%). Net income was $712m ($727m), down 2.1%, and diluted earnings per share $0.48 ($0.49). The company launched Pace, an operating model transformation with about $1.0bn of pre-tax charges and about $2.5bn of cumulative savings through fiscal 2031, and guided fiscal 2027 revenue down high-single digits with adjusted diluted EPS of $1.15 to $1.35.
Greater China fell $332m, 22.0% in dollars and 26% currency-neutral, 65.5% of the group decline; with Converse, down $103m or 28%, the two account for 85.8%. EMEA fell $155m, with footwear down $223m while apparel rose 5%. North America grew $107m, 2.1%, as wholesale rose $245m (+9%) and NIKE Direct fell $138m (−6%). Across NIKE Brand, Direct fell 8% (−9% currency-neutral), with Digital down 13% and NIKE-owned stores down 5%, and fell in all four geographies; wholesale rose to 62.1% of NIKE Brand revenue from 60.2%.
// KEY NUMBERS
Q1 FY2027 · three months to 31 August 2026
| Revenue | USD 11,213m |
|---|---|
| Reported growth | −4% |
| Constant-currency growth | −5% |
| Gross margin | 42.8% |
| Operating margin | 8.1% |
| Net income | USD 712m |
Gross margin rose 61bp, which the company attributes mainly to lower warehousing and logistics costs, and operating overhead fell $170m (−6.0%), but demand creation rose $64m (+5.4%). Gross profit less selling and administrative expense fell 4.2% to $888m. Other (income) expense moved from $23m of expense to $19m of income, a $42m swing; without it, EBIT would have fallen $39m. EBIT of the four geographies fell $126m, and Greater China lost $129m of EBIT (−34%), its margin falling to 21.0% from 24.9%; Global Brand Divisions (+$82m) and Corporate (+$61m) covered the gap. The effective tax rate rose to 22.7% from 21.1%, which the company attributes to foreign tax audit settlements.
Pace builds on the cost realignment announced in March 2026: about $1.0bn of pre-tax charges through fiscal 2031, primarily employee-related, on top of about $0.3bn of severance recognised in fiscal 2026, with about $0.3bn expected in fiscal 2027. Savings of about $2.5bn are 2.5 times the new charges, or 1.9 times including the fiscal 2026 severance. The adjusted EPS guidance excludes about $0.15 of Pace restructuring. The release does not say whether the high-single-digit revenue decline is reported or currency-neutral; with the first quarter down 4%, the remaining three quarters must fall faster than the full-year rate.
Inventories fell 3.3% to $7,846m against revenue down 4.3%, and days of inventory rose to 112.5 from 110.2. Receivables rose 5.6%. Cash and short-term investments less debt fell to $475m from $579m, and $2.0bn of debt is now due within a year. The second-quarter release will show whether currency-neutral revenue falls by more than the first quarter's 5%, as the guidance requires; Greater China after −26% currency-neutral and a 21.0% EBIT margin; and the Pace charge recognised against the about $0.3bn expected for the year, which the first-quarter release does not give.
// QUESTIONS
How much did Nike's revenue fall in Q1 fiscal 2027?
Nike's first-quarter revenue fell 4.3% to $11,213m, from $11,720m, and fell 5% currency-neutral. EBIT held at $907m against $904m.
Why did Nike's sales decline in the first quarter of fiscal 2027?
Greater China and Converse were $435m of the $507m decline. Greater China fell $332m, 26% currency-neutral, and Converse fell $103m, or 28%.
What is Nike's guidance for fiscal 2027?
Nike guided fiscal 2027 revenue down high-single digits and adjusted diluted EPS of $1.15 to $1.35. The EPS guidance excludes about $0.15 of restructuring under Pace, its operating model transformation.
Source: NIKE, Inc. Q1 FY2027 results release, Exhibit 99.1 to Form 8-K, 1 October 2026 ↗
Analysis by Pau Almar, VGR.
VGR analysis is an independent commercial reading of publicly disclosed company information, written from the perspective of a fashion retail sector operator. It is not investment research and it is not advice to buy, sell or hold any security. VGR is not a regulated financial adviser. Figures are taken from official company materials; figures derived by VGR are labelled as such. Readers should reach their own conclusions and take professional advice where appropriate.