NIKE reported fiscal first-quarter 2027 revenue of $11.2 billion, down 4% on a reported basis and 5% on a currency-neutral basis, as the company continued to see momentum in its performance business while taking additional actions to reposition NIKE Sportswear, Jordan Brand and Greater China.
Gross margin expanded 60 basis points to 42.8%, primarily reflecting lower warehousing and logistics costs.
Selling and administrative expenses declined 3% to $3.9 billion. Demand creation expense increased 5% to $1.3 billion as NIKE increased brand marketing investments around major sports events, while operating overhead expense declined 6% to $2.7 billion due primarily to lower wage-related and administrative costs.
Net income was approximately $700 million, down 2% from the prior-year period, while diluted earnings per share were $0.48.
NIKE Brand revenue was $11 billion, decreasing 4% on both a reported and currency-neutral basis. The decline primarily reflected weakness in Greater China and EMEA, partially offset by growth in North America.
NIKE Brand wholesale revenue declined 1% to $6.8 billion, with growth in North America partially offsetting declines in Greater China.
NIKE Direct revenue was $4.1 billion, down 8% on a reported basis and 9% on a currency-neutral basis. NIKE Brand Digital revenue declined 13%, while revenue from NIKE-owned stores decreased 5%.
Converse generated $263 million of revenue, down 28% on both a reported and currency-neutral basis, with declines across all geographic territories.
NIKE ended the quarter with $7.8 billion of inventory, down 3% year-over-year, primarily due to changes in product mix.
Cash, cash equivalents and short-term investments totaled $8.4 billion, approximately $200 million lower than a year earlier as operating cash generation was more than offset by dividends and capital expenditures.
NIKE returned approximately $610 million to shareholders through dividends during the quarter, an increase of 3% from the prior-year period.
Alongside the results, NIKE detailed Pace, an operating model transformation intended to accelerate and scale its Sport Offense strategy while reducing costs and simplifying the organization.
The program incorporates and expands upon the company’s cost realignment plan announced in March 2026.
Pace includes plans to modernize NIKE’s global supply chain, establish a new campus in India to expand enterprise capabilities, reorganize operations around three geographic regions and further streamline the company’s organizational structure.
NIKE expects Pace to generate approximately $2.5 billion of cumulative savings through fiscal 2031.
The company expects approximately $1 billion of pretax charges associated with the program through fiscal 2031, primarily related to employees. That amount is in addition to approximately $300 million of severance costs recognized during fiscal 2026.
Approximately $300 million of Pace-related charges are expected during fiscal 2027.
The estimated savings are before those charges and any future reinvestment of savings into the business.
For fiscal 2027, NIKE expects revenue to decline by a high-single-digit percentage.
The company expects an effective tax rate in the mid-20% range and adjusted diluted earnings per share between $1.15 and $1.35.
The adjusted EPS guidance excludes approximately $0.15 per share of fiscal 2027 restructuring expenses associated with Pace.
KEY QUOTES:
“The Sport Offense is driving measurable progress across our performance business, and we introduced Pace to help us accelerate and scale that momentum across NIKE. We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we’re taking deliberate actions to strengthen those businesses the right way for the long-term.”
Elliott Hill, President and Chief Executive Officer of NIKE
“We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management. As we move forward, we remain focused on strengthening the health of our product portfolio, improving productivity across the enterprise and allocating resources with discipline to support long-term shareholder value.”
Dave Denton, Executive Vice President and Chief Financial Officer of NIKE
