Nike announced its fiscal first-quarter results for 2027.
Overall results
First-quarter revenue totaled $11.2 billion, down 4% on a reported basis and down 5% at constant currency.*
Gross margin increased by 60 basis points to 42.8%.Selling, general and administrative expenses decreased by 3% to $3.9 billion.
Diluted earnings per share were $0.48.
Nike President and CEO Elliott Hill stated: "The Sports Performance strategy is driving measurable progress across our entire Sports Performance business, and we launched the Pace program to help us accelerate and expand this momentum within Nike. We still have much work to do in Nike Sportswear, the Jordan Brand, and Greater China, and we are taking prudent steps to strengthen these businesses for long-term growth in the right way."
Dave Denton, Executive Vice President and Chief Financial Officer of Nike, stated: "Our first-quarter results were in line with expectations, driven by an improved gross margin and stringent cost control. Looking ahead, we will continue to focus on strengthening our product portfolio, enhancing enterprise-wide productivity, and allocating resources in a disciplined manner to support long-term shareholder value."
First-Quarter Income Statement Review
Nike's revenue was $11.2 billion, down 4% on a reported basis and down 5% at constant currency.
Nike's revenue totaled $11 billion, down 4% on both a reported and constant-currency basis, primarily due to declines in Greater China and the Europe, Middle East, and Africa regions, though growth in North America partially offset this impact.
Nike's wholesale revenue totaled $6.8 billion, down 1% on both a reported and constant-currency basis, primarily due to a decline in Greater China, which was partially offset by growth in North America.
NIKE Direct reported revenue of $4.1 billion, down 8% on a reported basis and 9% on a constant-currency basis, driven by a 13% decline in NIKE brand digital sales and a 5% decline in NIKE-owned stores.
Converse reported revenue of $263 million, down 28% on both a reported and constant-currency basis, as revenues declined across all regions.
Gross margin expanded by 60 basis points to 42.8%, primarily driven by lower warehousing and logistics costs.
Selling and administrative expenses decreased by 3% to $3.9 billion.
Demand‑driven spending totaled $1.3 billion, up 5%, primarily due to higher brand‑marketing expenditures, reflecting increased investment in key sporting events.
Operating expenses totaled $2.7 billion, down 6%, primarily due to reductions in payroll-related expenses and other administrative costs.
The effective tax rate was 22.7%, compared with 21.1% in the same period last year, primarily due to the recognition of foreign tax audit settlements during the current year.
Net profit was $70 million, down 2%; diluted earnings per share were $0.48.
Latest developments
The Pace Plan is an operational transformation aimed at accelerating and scaling the success of its sports business. The plan builds on and expands the cost‑adjustment initiative previously announced in March 2026. Key elements of the Pace Plan include: modernizing Nike's global supply chain; establishing a new campus in India to strengthen its corporate capabilities; refocusing the business into three regions; and further streamlining the organizational structure to reduce costs.
Nike expects that, by fiscal year 2031, the Pace program will generate cumulative savings of approximately $2.5 billion, with pre-tax expenses of about $1 billion, primarily consisting of employee-related costs; in addition, approximately $300 million in severance costs will be recognized in fiscal year 2026. Nike also anticipates recognizing another approximately $300 million in fiscal year 2027.
Prospects
Revenue is expected to decline by a high single-digit percentage in fiscal year 2027.
The effective tax rate for fiscal year 2027 is expected to be around 20%, with the exact rate contingent on changes in the earnings mix and individual tax items.
Adjusted diluted earnings per share** are expected to be between $1.15 and $1.35, excluding approximately $0.15 of restructuring expenses related to Pace for fiscal year 2027.
