NIKE, Inc.

NKE · NYSE · USD

Analysis

Last 4 earnings calls · through Q1 FY2027

Nike is getting smaller on purpose — cutting discounted Sportswear, Jordan retro and Chinese digital revenue while betting a growing performance business and a leaner cost base get it back to double-digit margins. The cuts are landing; the payoff keeps moving further out.How much of the FY2027 revenue decline is deliberate versus lost demand?

  • Management is shrinking Nike on purpose to fix the marketplace.

    Sportswear is under half of sales and Jordan another 13%, and both were cut on purpose — the Dunk was halved in Q1 FY2027 and Jordan retro supply is being pulled back to make the Jumpman scarce. Profit is guided to fall faster than sales.

  • Performance is now the engine, and it is working.

    The sport business reached $16 billion last year and grew high single digits again in Q1 FY2027: Running up double digits for a fifth straight quarter, World Cup kit sales double 2022. Performance has to fill the hole Sportswear leaves.How big does Performance need to get to cover Sportswear?

  • China is the deepest cut, and management says it gets worse first.

    Greater China revenue fell 26% in Q1 FY2027 after Nike cut digital sellers it called brand-diluting, and it guided the region lower for the rest of the year. The cleanup runs for multiple seasons, so that revenue may never come back.How deep does the China digital cleanup cut before revenue bottoms?

Bullish
  • Performance sport offense
    The bull case is that NIKE has rebuilt its product process sport by sport, and the growth that started in running is now spreading into football, training and basketball.
  • Wholesale shelf space
    Rebuilt wholesale relationships are winning back shelf space and door count, which the bull side treats as a durable distribution advantage that the direct business had narrowed.
  • Structural cost reduction
    The cost program is designed to make the supply chain smaller and more variable, so the bull case assumes spending on sport can rise without the old overhead.
Bearish
  • Lifestyle business decline
    The bear case is that the lifestyle businesses supply about half of revenue and keep shrinking, so gains in performance cannot close the total revenue gap.
  • China reset timeline
    China keeps getting worse as management removes discount channels, and the bear side doubts the market returns to growth on the timeline now described.
  • Tariff and input costs
    Tariffs on goods made in Asia raise landed costs, and the bear side argues these increases keep gross margin from recovering even as internal actions improve.
See the full bull & bear case
PoliticiansInstitutionsInsiders
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Donald Trump
Republican · Executive
Purchase≥$15KAug 28Oct 8
Donald Trump
Republican · Executive
Sale≥$100KAug 21Oct 8
Donald Trump
Republican · Executive
Sale≥$1KAug 10Oct 8
Donald Trump
Republican · Executive
Purchase≥$100KJul 31Sep 22
Donald Trump
Republican · Executive
Purchase≥$50KJul 27Sep 22

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Product segmentsGeography
FY2026 · USD

How NIKE turned $46.4B of revenue into $3.8B of operating income.

Revenue
Footwear$30.5B▼ 1.39% YoY
Apparel$15.7B▲ 2.94% YoY
Product and Service, Other$143.0M▲ 93.24% YoY
Total revenue$46.4B
Gross profit$19.9B42.9%
Operating income$3.8B8.2%
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