NKE changes
Pick any two versions below to diff them.
- Price
- $37.15
- Discount category
- Below intrinsic value
- Next earnings
- 2026-12-17
- Next earnings is estimate
- Yes
- Company name
- Nike
- Sector
- Sportswear
- About
- Nike designs and sells athletic footwear, apparel and equipment under the Nike and Jordan brands, and casual shoes under the Converse brand. It sells to retailers through wholesale and directly to consumers through Nike Direct, which includes its own stores and digital sales. Its geographic segments are North America, Europe, Middle East and Africa, Greater China, and Asia Pacific and Latin America. Revenue was $46.4 billion in fiscal 2026, which ended on May 31, 2026. The company is based near Beaverton, Oregon.
- Thesis
- The market prices Nike for a long turnaround with falling sales and low margins. Revenue was flat in fiscal 2026, and the company expects revenue to fall by a high single-digit percentage in fiscal 2027. Revenue in Greater China fell 26% at constant currency in Q1 fiscal 2027, Converse revenue fell 28%, and Nike Brand digital sales fell 13%. The company expects adjusted EPS of only $1.15 to $1.35 in fiscal 2027, against diluted EPS of $2.10 in fiscal 2026. The company says that more actions for Nike Sportswear and Jordan Brand continue after fiscal 2027. For the gap to close, three things must be true. North America and the performance business must keep growing, as they did in Q1 fiscal 2027. The declines in Greater China, Nike Sportswear and Converse must slow. The Pace program must deliver its savings of about $2.5 billion through fiscal 2031, so that margins rise again. The Q2 fiscal 2027 report, expected in December 2026, gives the next test. The fiscal 2028 outlook, expected in June 2027, shows if revenue can grow again. This is a turnaround of several years, so the gap can close only slowly. The main reason it may not close is that competitors keep market share that Nike lost.
- Risks
- Revenue in Greater China fell 26% at constant currency in Q1 fiscal 2027. The company reports lower store traffic, more discounts and high inventory in that market. Actions in Greater China continue after fiscal 2027. Nike Sportswear, Jordan Brand and Converse still decline. Converse revenue fell 28% in Q1 fiscal 2027. If the lifestyle business does not recover, revenue and margins stay low. The Pace program costs about $1.0 billion before tax and moves work to a new campus in India and to three geographies. A large change in the organization can disrupt the business or deliver less savings than planned. Nike buys most of its products from factories in Asia. Tariffs lowered gross margin in fiscal 2026. New tariffs, or a recovery of IEEPA tariffs below the $986 million that Nike expects, can lower earnings.
- Balance sheet
- Cash: $8.4B Debt: $7.9B Net cash: $475M Debt due within 12 months: $2.0B Ratings: S&P A+, Moody's A2 Nike has a strong balance sheet. Cash and short-term investments were $8.37 billion at August 31, 2026, and debt was $7.89 billion, so cash was more than debt. Notes of $2.0 billion are due within one year. S&P rates the long-term debt A+, and Moody's rates it A2. Nike had no borrowings under its committed credit facilities or its $3 billion commercial paper program at August 31, 2026. In March 2026, it added a $1 billion 364-day credit facility that ends on March 5, 2027. Free cash flow was $2.18 billion in fiscal 2026: operating cash flow of $2.87 billion less capital spending of $684 million. Dividends were $2.4 billion in fiscal 2026, more than this free cash flow, and the quarterly dividend is $0.41 per share. Nike bought back only $123 million of stock in fiscal 2026. As of 2026-08-31.
- Checkpoints
- Dec 17, 2026 (estimate): Q2 fiscal 2027 results: decline and margins. Pending. Watch: A revenue decline in line with the high single-digit outlook, a smaller fall in Greater China and higher gross margin pass; a lower EPS outlook or faster declines in Greater China and Nike Direct fail. Jun 2027 (estimate): Fiscal 2027 results and fiscal 2028 outlook. Pending. Watch: A fiscal 2028 outlook for revenue growth and higher margins from Pace savings passes; an outlook for another year of lower revenue fails.
- Recent events
- 2026-10-01: Nike reported Q1 fiscal 2027 results. Revenue fell 4% to $11.2 billion, and diluted EPS was $0.48. Gross margin rose 0.6 points to 42.8%. North America revenue rose 2%, and Greater China revenue fell 22%. Nike announced Pace, a program that changes its operating model. It expects savings of about $2.5 billion through fiscal 2031 and pre-tax charges of about $1.0 billion. For fiscal 2027, Nike expects revenue to fall by a high single-digit percentage and adjusted EPS of $1.15 to $1.35. 2026-09-15: Nike increased its board to twelve directors and appointed Alexandre Arnault, Deputy Chief Executive Officer of Moët Hennessy, as a director. 2026-06-30: Nike reported fiscal 2026 results. Revenue was $46.4 billion, flat on a reported basis, and diluted EPS fell 3% to $2.10. Q4 diluted EPS was $0.72, including a benefit of $0.52 per share from the expected recovery of $986 million of IEEPA tariffs. Nike Direct revenue fell 6% in the year, and Converse revenue fell 31%. 2026-06-23: Nike named David Denton, the former Chief Financial Officer of Pfizer and Lowe's, as its Chief Financial Officer from August 2026. He replaced Matthew Friend. 2026-03-31: Nike reported Q3 fiscal 2026 results. Revenue was $11.3 billion, flat on a reported basis, and gross margin fell 1.3 points to 40.2% because of higher tariffs. Diluted EPS fell 35% to $0.35. The quarter included pre-tax charges of about $300 million, mainly for employee severance. 2025-12-18: Nike reported Q2 fiscal 2026 results. Revenue rose 1% to $12.4 billion, and wholesale revenue rose 8%. Nike Direct revenue fell 8%, gross margin fell 3.0 points to 40.6%, and diluted EPS fell 32% to $0.53.