Nike’s turnaround is not yet established: fiscal 2026 revenue stabilized after a steep decline, but revenue fell again in fiscal 2027 Q1. Gross margin improved modestly, while inventory rose sequentially by August 2026. To judge whether progress is durable, compare revenue across matching periods, separate wholesale from Direct, examine what drives margin changes, and treat inventory as a dated balance—not a stand-alone verdict.
Start with comparable periods and the right measures
Nike’s fiscal 2027 first quarter ended August 31, 2026; fiscal 2026 ended May 31, 2026. Revenue and gross margin measure performance over a period. Inventory is a balance on a specific date, so it must be compared with another balance date. Nike reports revenue both as reported and on a currency-neutral basis, which applies prior-year comparative-period exchange rates to remove the effect of foreign-exchange translation.
The figures below come from Nike’s official filings and releases: the fiscal 2027 Q1 results, fiscal 2026 Q4 and full-year results, and fiscal 2025 full-year results, along with its fiscal 2027 Q1 Form 10-Q and fiscal 2026 Form 10-K.
Is Nike revenue growing again?
Not consistently in the latest reported periods. Nike’s fiscal 2025 revenue contracted sharply; fiscal 2026 was nearly flat in reported dollars but still declined on a currency-neutral basis. The subsequent quarter was down year over year on both measures.
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| Period | Revenue | Reported change | Currency-neutral change |
|---|---|---|---|
| Fiscal 2025 | $46.3 billion | Down 10% | Down 9% |
| Fiscal 2026 | $46.4 billion | Flat | Down 2% |
| Fiscal 2027 Q1, ended August 31, 2026 | $11.2 billion | Down 4% year over year | Down 5% year over year |
The gap between reported and currency-neutral change matters: exchange-rate translation can make reported revenue look stronger or weaker than the underlying comparison. Fiscal 2026’s flat reported result therefore did not mean underlying growth, and the latest quarter does not confirm a sustained return to growth.
Separate wholesale from NIKE Direct
Channel mix adds context that the consolidated total hides. Wholesale improved in fiscal 2026 while NIKE Direct declined. In fiscal 2027 Q1, both channels were down currency-neutral, with Direct falling more sharply.
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| Channel | Fiscal 2025 | Fiscal 2026 | Fiscal 2027 Q1 |
|---|---|---|---|
| Wholesale | $25.9 billion | $27.5 billion; up 4% currency-neutral | $6.8 billion; down 1% currency-neutral year over year |
| NIKE Direct | $18.8 billion | $17.7 billion; down 8% currency-neutral | $4.1 billion; down 9% currency-neutral year over year |
Digital sales, part of Direct, declined 13% currency-neutral in fiscal 2027 Q1. It would be misleading to describe wholesale as broadly recovering based only on its fiscal-year result: it was down in the latest quarter.
Check regional and brand differences
In fiscal 2027 Q1, North America revenue rose 2% currency-neutral, supported by wholesale growth of 9%, even as NIKE Direct fell 6%. EMEA declined 5% and Greater China declined 26%, all currency-neutral. Converse revenue fell 28% currency-neutral. Nike said negative impacts from Greater China and Converse were expected to continue throughout fiscal 2027. A consolidated improvement driven by one region would not, by itself, show that demand is recovering broadly.
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Are Nike’s margins recovering?
The annual change was small, and the latest quarterly increase had a stated cost driver. Gross margin fell 190 basis points in fiscal 2025 to 42.7%, with Nike citing higher discounts, channel-mix changes, and increased inventory-obsolescence reserves, partly offset by lower product costs. In fiscal 2026, it rose 20 basis points to 42.9%. Fiscal 2027 Q1 margin was 42.8%, up 60 basis points year over year.
Nike attributed the Q1 year-over-year increase primarily to lower warehousing and logistics costs, which contributed 90 basis points. Higher other costs, a lower NIKE Brand average selling price, and lower Converse margin partly offset that benefit. When evaluating a margin change, use the explanation of its drivers—not just the percentage. Discounts, pricing, product and channel mix, costs, foreign exchange, and unusual items can have different implications for durability.
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Do not treat the Q4 fiscal 2026 spike as a run rate
Fiscal 2026 Q4 gross margin rose 890 basis points to 49.2%. Nike attributed approximately 900 basis points to the expected recovery of IEEPA tariffs. That unusually large effect means the quarter’s margin level should not be projected as recurring operating improvement. Q4 revenue was also down 1% reported and 4% currency-neutral.
Is Nike inventory going down?
It depends on which dates you compare. Inventory was $7.5 billion on May 31, 2026, flat year over year from May 31, 2025. At May 2026 year-end, increased units were offset by product mix. By August 31, 2026, inventory was $7.8 billion, a 5% increase from May 31, primarily due to product-mix shifts.
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The August-to-May comparison is sequential, not year over year. The official figures cited here do not establish an August year-over-year comparison. Nor do total inventory dollars alone establish whether sell-through has improved, products are aging, or inventory is appropriately positioned across products and geographies. Avoid calling inventory either cleared or excessive based only on these balances.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A practical test for whether the turnaround is working
Use a repeatable checklist each time Nike reports results. Improvement across several consecutive reports and geographies is stronger evidence than one favorable quarter or one balance-sheet movement.
- Revenue: Compare year-over-year results for the same fiscal quarter, noting both reported and currency-neutral changes.
- Channels: Track wholesale and NIKE Direct separately, and watch Digital within Direct. Do not let growth in one channel obscure declines in another.
- Regions and brands: Check whether improvement extends beyond stronger areas such as North America, especially while Greater China and Converse remain weak.
- Gross margin: Record the percentage and the stated bridge—discounts, costs, prices, channel and product mix, foreign exchange, or one-time effects. Distinguish recurring operating changes from unusual benefits.
- Inventory: Compare balances at like dates, state whether the comparison is year over year or sequential, and include Nike’s explanation of unit and mix changes where available.
This is an analytical framework based on the metrics Nike reports, not company guidance. CEO Elliott Hill described fiscal 2026 actions as strengthening the company’s foundation and repositioning it for long-term growth; that is management’s characterization, not proof that the turnaround has succeeded. The evidence to watch is sustained operating progress in the reported results.
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