Nike is set to report its fiscal first-quarter earnings after the bell on Thursday, with expectations pointing to another quarter of declining sales as the company continues its turnaround efforts under CEO Elliott Hill [1]. According to a survey of analysts by LSEG, Nike is expected to post earnings per share of 43 cents and revenue of $11.32 billion for the quarter [1]. The company previously reported $4.83 billion in revenue for North America last quarter, missing Wall Street expectations of $4.88 billion, and saw a 12% drop in sales in China, a market that was once highly lucrative for Nike [1].
Former CFO Matt Friend indicated that sales for the first two quarters of fiscal 2027 are expected to be 'flattish,' particularly due to the ongoing slump in China [1]. Despite these challenges, Nike anticipates its gross margin for the first fiscal quarter to be slightly positive compared to the prior-year period [1]. For the current fiscal year, analysts project total revenue of around $45.31 billion, with second-quarter revenue expected to reach $11.79 billion [1].
Nike recently benefited from a nearly $986 million tariff refund, which contributed 52 cents per share to its earnings in the previous quarter, marking a rare bright spot in its financial results [1]. The company is executing a turnaround plan that prioritizes improvements in different business segments, but consumer spending has been pressured by macroeconomic factors such as geopolitical tensions and higher inflation [1].
Bank of America analysts downgraded Nike's stock from neutral to underperform last week, citing rising risks, continued sluggishness in the sneaker category, and the likelihood of further disappointing results in China, as well as sustained stock declines [1]. Nike shares have fallen more than 40% this year [1]. The company will host a conference call with analysts at 5 p.m. ET [1].
CONCLUSION
Nike is expected to report another quarter of weak sales, with particular challenges in China and ongoing macroeconomic pressures impacting consumer demand. Analyst sentiment has turned negative, and the stock has experienced significant declines, reflecting heightened market concerns ahead of the earnings release.