Nike tops profit forecasts, then guides the year down: FY2027 revenue to fall high-single-digits

Nike beat Wall Street's profit forecast for its fiscal first quarter but fell short on revenue -- then warned that fiscal 2027 revenue will decline by a high-single-digit percentage, sending shares down 4% after hours.

The guide-down is the story

Nike's first quarter was a Rorschach test, and Wall Street saw the bear. The sportswear giant earned 48 cents a share, beating the roughly 44 cents analysts expected, but revenue of $11.2 billion missed the $11.32 billion consensus -- and then the company warned the full year gets worse.

Nike said fiscal 2027 revenue will decline by a high-single-digit percentage and guided adjusted earnings per share to $1.15 to $1.35, excluding about 15 cents of restructuring expense. Analysts had expected $1.67. Shares fell 4% in extended trading.

China is still the problem

Greater China remains the weak spot. Earnings before interest and taxes in the region were about $250 million, well short of the roughly $310 million analysts expected, and revenue there fell 22% to $1.18 billion. Europe sagged too, down 5%. North America was the lone bright spot, up 2% as wholesale sales to retailers grew 9%.

Tighter operations, tired brands

The quarter had genuine operational bright spots. Gross margin expanded 60 basis points to 42.8% on lower warehousing and logistics costs, and inventories of $7.8 billion came in below the roughly $8 billion analysts expected -- leaner stock means less discounting ahead.

But the brand portfolio is fraying at the edges. Nike Direct revenue fell 8%, with digital sales down 13%, and Converse tumbled 28% to $263 million with declines across every territory.

Nike also deepened its restructuring, announcing a new operating-model program with more job cuts aimed at modernizing the supply chain -- an effort the company says will strip about $2.5 billion of costs out of the business through fiscal 2031.

The market had already voted

Skepticism was already at record levels before the print. Short interest stood above 87 million shares, a record high, according to S3 Partners -- up 55 million shares over the past year, taking short exposure from below 3% of the float to above 7%.

The stock has fallen 44% in 2026, trades near its lowest since early 2014, and was removed from the S&P 100 in September after 18 years in the index. The next catalyst is November's investor day, when incoming CFO David Denton is expected to lay out refreshed guidance. Until then, the turnaround story belongs to the skeptics.