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Nike has reported its first-quarter fiscal 2027 results, and they give investors a mixed picture: gross margin improved modestly, but revenue fell and Nike expects a high-single-digit decline in sales for the full fiscal year. The results were released October 1, 2026, after the quarter ended August 31.
What were Nike’s earnings?
NIKE, Inc. reported Q1 FY27 revenue of $11.2 billion, down 4% from a year earlier on a reported basis and 5% on a currency-neutral basis. Diluted earnings per share were $0.48, and net income was $0.7 billion, down 2%. Gross margin increased 60 basis points to 42.8%.
The margin improvement is positive, but it did not coincide with sales growth. Selling and administrative expense fell 3%, which helped limit costs, while the revenue decline shows that demand and channel performance remain central concerns. Nike’s Q1 FY27 results provide the company’s reported figures and management commentary.
When did Nike report earnings?
Nike reported Q1 FY27 results on October 1, 2026. The quarter ended August 31, 2026, so this is a post-report assessment rather than an earnings preview.
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Where are Nike’s sales weakening?
Nike Brand revenue was $11.0 billion, down 4%. Wholesale revenue declined 1% to $6.8 billion, while NIKE Direct fell 8% to $4.1 billion, or 9% on a currency-neutral basis. Within Direct, NIKE Brand Digital dropped 13% and Nike-owned stores declined 5%.
The contrast matters: wholesale was comparatively resilient, but Nike’s owned digital and store channels declined more sharply. Converse was also weak, with revenue of $263 million, down 28%.
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Geographically, Nike attributed the Brand decline primarily to weakness in Greater China and EMEA, partly offset by growth in North America. CEO Elliott Hill said the company had more work to do in NIKE Sportswear, Jordan Brand and Greater China. His comments describe management’s priorities; they are not independent evidence that a recovery is underway.
Is Nike’s turnaround working?
The Q1 report does not establish that the turnaround has succeeded. Nike’s performance business showed what management called measurable progress, while the company also reported weaker Direct sales, a steep Converse decline and a forecast for falling full-year revenue. Those figures support a cautious reading: some parts of the business may be improving, but the overall sales trend has not yet turned positive.
Inventory was $7.8 billion as of August 31, down 3%, primarily reflecting shifts in product mix. Cash and equivalents plus short-term investments totaled $8.4 billion. These balance-sheet figures provide context, but by themselves do not demonstrate that demand or the turnaround is improving.
Why Q4’s margin jump is not a clean comparison
In Q4 FY26, Nike reported revenue of $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 expected recovery of IEEPA tariffs. Q4 diluted EPS of $0.72 included a $0.52 benefit related to that expected recovery.
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That makes the Q4 margin increase a poor baseline for judging ordinary operating progress: the tariff-related benefit was approximately as large as the reported margin expansion. Q1’s 60-basis-point improvement is much smaller and should be assessed separately. Nike’s Q4 FY26 results describe the quarter and the expected tariff recovery.
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 to $1.35, excluding about $0.15 of Pace-related restructuring expenses. Adjusted EPS is a non-GAAP measure, so it is not the same as a forecast of GAAP earnings per share.
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The revenue forecast is the clearest near-term signal in the outlook: even with Q1 gross margin improvement and management’s stated progress in performance products, Nike expects another difficult year for sales.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What is Pace, and what could it cost?
Pace is Nike’s operating-model transformation, intended to accelerate and scale its Sport Offense strategy. The plan includes modernizing the global supply chain, establishing an enterprise-capabilities campus in India, shifting to three geographies and further streamlining the organization.
Nike estimates approximately $2.5 billion in cumulative savings through fiscal 2031. The company also estimates about $1.0 billion in pre-tax charges through that period, in addition to approximately $0.3 billion of severance costs recognized in FY26. It expects about $0.3 billion of Pace charges in FY27. These are management estimates, not guaranteed net savings: the figures do not establish how much cash will be spent in each period or how much of the savings will ultimately reach earnings.
Nike’s filing cautions that savings may not be achieved in the expected amounts or timeframes. It also identifies execution disruption, competition, innovation, changing consumer preferences, demand forecasting and channel mix as risks to the plan. These are disclosed risks, not assertions that any particular problem will occur. Nike’s SEC filings contain the company’s formal risk disclosures.
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Quick Recap
What investors should watch next
- Sales trend: Whether reported and currency-neutral revenue move toward stabilization against the FY27 decline outlook.
- Direct channels: Whether digital and owned-store declines narrow, and whether wholesale remains more resilient.
- Geography and brands: Whether Greater China, EMEA, Sportswear and Jordan improve enough to offset areas of strength such as North America.
- Margin quality: Whether margin changes reflect ongoing business performance rather than one-time or unusual benefits such as the expected tariff recovery in Q4 FY26.
- Pace execution: Whether savings, restructuring costs and operational changes track management’s estimates without disrupting product delivery or demand.
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