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Nike reported Q1 FY27 results on October 1, 2026, and the numbers offer mixed evidence on its turnaround: gross margin improved, but revenue fell and management expects a high-single-digit decline for the full fiscal year. Weakness in Nike Direct, Converse, Greater China and EMEA remains a concern, while the company’s new Pace program is a multi-year plan whose projected savings are not guaranteed.
When did Nike report earnings?
Nike reported its first-quarter fiscal 2027 results on October 1, 2026. The quarter ended August 31, 2026. The report is therefore an update on results already announced, not a preview of an upcoming earnings release. Nike’s Q1 FY27 results
What were Nike’s earnings?
NIKE, Inc. reported revenue of $11.2 billion, down 4% year over year on a reported basis and 5% on a currency-neutral basis. Diluted earnings per share (EPS) were $0.48, and net income was $0.7 billion, down 2%. Gross margin was 42.8%, an increase of 60 basis points. Selling and administrative expense fell 3%.
The revenue decline was uneven across channels and brands:
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| Business or measure | Q1 FY27 result |
|---|---|
| Nike Brand revenue | $11.0 billion, down 4% |
| Wholesale | $6.8 billion, down 1% |
| NIKE Direct | $4.1 billion, down 8% reported and 9% currency-neutral |
| NIKE Brand Digital | Down 13% |
| Nike-owned stores | Down 5% |
| Converse | $263 million, down 28% |
Nike attributed Nike Brand weakness primarily to declines in Greater China and EMEA, partly offset by growth in North America. The channel split is notable: wholesale declined less than Direct, while both Nike-owned digital and stores were down.
Inventory was $7.8 billion as of August 31, down 3%, primarily reflecting changes in product mix. Cash and equivalents plus short-term investments totaled $8.4 billion.
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Is Nike’s turnaround working?
The quarter does not establish that a durable turnaround is underway. It shows some improvement in profitability measures alongside continued sales contraction. Nike CEO Elliott Hill said the company’s Sport Offense strategy was driving “measurable progress” in its performance business. That is management’s assessment; the reported results do not independently verify that the progress will persist or extend to weaker businesses.
There is also a reason not to treat every margin increase as evidence of a broad recovery. In Q4 FY26, revenue was $11.0 billion, down 1%, and NIKE Direct fell 7%. Gross margin rose 890 basis points to 49.2%, but Nike attributed approximately 900 basis points of benefit to the expected recovery of IEEPA tariffs. Q4 diluted EPS of $0.72 included a $0.52 benefit related to that expected recovery. By comparison, Q1 FY27’s 60-basis-point margin improvement was much smaller. Nike’s Q4 FY26 results
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Hill also acknowledged that Nike has “more work to do” in Sportswear, Jordan Brand and Greater China. The report’s continuing sales decline, steep Direct and Converse drops, and full-year outlook all weigh against calling the turnaround complete.
What is Nike’s FY27 outlook?
Nike expects FY27 revenue to decline by a high-single-digit percentage. It forecasts adjusted diluted EPS of $1.15–$1.35, excluding approximately $0.15 of Pace-related restructuring expenses. Adjusted EPS is a non-GAAP measure, so it is not directly equivalent to the reported diluted EPS figure for Q1.
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The outlook puts management’s stated progress in context: the company is guiding for a weaker year overall, not a return to revenue growth. The company’s results release includes its outlook and reconciliation information. Nike’s Q1 FY27 results and outlook
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Nike introduced Pace as an operating-model transformation intended to accelerate and scale its Sport Offense strategy. The program includes modernizing the global supply chain, establishing an India campus for enterprise capabilities, shifting to three geographies and further streamlining the organization.
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Nike estimates approximately $2.5 billion in cumulative savings through fiscal 2031. It also estimates about $1.0 billion in pre-tax charges through that period, in addition to about $0.3 billion of severance costs recognized in FY26, and expects about $0.3 billion of Pace charges in FY27. These are management estimates; actual savings, charges and cash expenditures could differ materially. The savings estimate is not a guaranteed net benefit, and the figures alone do not establish when or how fully savings will offset costs.
The company’s filing says projected savings may not be achieved in the expected amounts or timeframes. It also identifies risks involving execution disruption, competition, innovation, consumer preferences, demand forecasting and channel mix. These are disclosed risks, not predictions that any particular problem will occur. Nike’s Q1 FY27 filing
Quick Recap
What should readers watch next?
- Whether Nike Direct stabilizes, especially digital sales, rather than continuing to lag wholesale.
- Whether Greater China and EMEA weakness eases and North American growth can offset it.
- Whether Converse’s decline moderates.
- Whether margin improvement continues without relying on a one-time or exceptional benefit like the tariff-recovery effect that influenced Q4.
- Whether Pace delivers savings on the announced timetable without disrupting execution, while Nike manages the associated charges.
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