Nike Q1 2027 earnings: profit beats, but China slump and soft guidance cloud turnaround
Nike's fiscal Q1 2027 profit beat estimates as cost cuts helped margins, but revenue slipped and China sales fell sharply, while full-year guidance signals a longer turnaround.
| Q1 2027 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $0.48 | $0.44 | +10.0% |
| Revenue | $11.21B | $11.43B | -1.9% |
Key takeaways
- Profit came in stronger than Wall Street expected for the quarter, while total sales slipped versus a year ago and fell a bit short of forecasts — a sign the turnaround is progressing but not yet translating into sales growth.
- The TTM gross margin of roughly 43% reflects a gradual improvement in how much Nike keeps after the cost of making its products, aided by lower warehousing and shipping costs; management expects margin pressure from tariffs to ease further starting next quarter.
- Greater China remained the weak spot, with sales there dropping sharply as Nike works through a ‘Win Now’ plan — sharper storytelling, tighter product assortments, and better store presentation in cities like Beijing and Shanghai.
- CEO Elliott Hill said the company has ‘diagnosed the problem’ in China and aims to restore Nike as a premium, innovative brand there, but cautioned the reset ‘will take time.’
- North America wholesale orders are improving, a sign retail partners are regaining confidence in the brand, though sell-through at stores remains uneven heading into the holiday season.
- Inventory held roughly flat at about $7.5 billion, suggesting Nike has avoided a buildup of unsold goods that would otherwise force deeper discounting.
- For the full fiscal year, Nike guided revenue to fall by a high-single-digit percentage and adjusted earnings per share to land between $1.15 and $1.35 — well below the roughly $1.65 analysts had been modeling, signaling the recovery will extend through fiscal 2027.
- Tariffs continue to weigh on costs, with the company citing incremental duty rates of 10% through July and 15% thereafter as a drag it expects to lessen in coming quarters.
Q1 2027 in context
| Metric | Aug 2026 | Aug 2025 | Change |
|---|---|---|---|
| Revenue | $11.2B | $11.7B | -4.3% |
| Net income | $712M | $727M | -2.1% |
| Free cash flow | -$64M | $15M | -526.7% |
| Diluted EPS | $0.48 | $0.49 | -2.0% |
| Gross margin | 42.8% | 42.2% | +0.6 pts |
| Net margin | 6.3% | 6.2% | +0.1 pts |
Figures for the quarter ended Aug 2026 and the quarter ended Aug 2025, as reported to the SEC.
How the stock took it
Nike Inc closed at $35.40 on Sep 30, 2026, the last session before the report, and at $33.87 on Oct 2, 2026, the first session after it — -4.3% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 42.9% | Trailing 12 months |
| Operating margin | 8.2% | Trailing 12 months |
| Net profit margin | 6.7% | Trailing 12 months |
| Pretax margin | 8.4% | Trailing 12 months |
| EPS | $2.10 | Trailing 12 months |
| Revenue growth (YoY) | 0.2% | Trailing 12 months |
| EPS growth (YoY) | -2.8% | Trailing 12 months |
| Return on equity | 22.0% | Trailing 12 months |
Sources: company report · earnings call · reputable coverage