WS News
02 Oct 2026, 09:27
Nike Stock Falls 10% Premarket as Weak Sales Outlook Overshadows Margin Improvement
Nike shares fell about 10% in premarket trading after the company reported fiscal first-quarter results showing continued revenue pressure and issued a weak full-year sales outlook.
Fiscal Q1 revenue fell 4% to $11.2 billion, or 5% on a currency-neutral basis. Nike Brand revenue declined 4%, while Nike Direct revenue dropped 8%, including a 13% decline in Nike Brand Digital sales. Converse remained particularly weak, with revenue falling 28%.
Profitability showed some improvement. Gross margin expanded 60 basis points to 42.8%, helped by lower warehousing and logistics costs, while selling and administrative expenses declined 3%. Net income was $0.7 billion, down 2%, and diluted EPS was $0.48.
The main pressure on the stock appears to be the outlook. Nike expects fiscal 2027 revenue to decline at a high-single-digit rate and adjusted EPS of $1.15 to $1.35. That signals that the company’s turnaround is likely to take longer, despite progress in margins and cost control.
Management also acknowledged continued weakness in Nike Sportswear, Jordan Brand and Greater China. The new Pace restructuring program is expected to generate about $2.5 billion in cumulative savings through fiscal 2031, but it also carries roughly $1.0 billion of expected pre-tax charges.
The premarket selloff suggests investors are focusing less on the quarter’s margin improvement and more on the depth and duration of the revenue decline, particularly in digital sales, China and key lifestyle categories.
Nike shares fell about 10% in premarket trading after the company reported fiscal first-quarter results showing continued revenue pressure and issued a weak full-year sales outlook.
Fiscal Q1 revenue fell 4% to $11.2 billion, or 5% on a currency-neutral basis. Nike Brand revenue declined 4%, while Nike Direct revenue dropped 8%, including a 13% decline in Nike Brand Digital sales. Converse remained particularly weak, with revenue falling 28%.
Profitability showed some improvement. Gross margin expanded 60 basis points to 42.8%, helped by lower warehousing and logistics costs, while selling and administrative expenses declined 3%. Net income was $0.7 billion, down 2%, and diluted EPS was $0.48.
The main pressure on the stock appears to be the outlook. Nike expects fiscal 2027 revenue to decline at a high-single-digit rate and adjusted EPS of $1.15 to $1.35. That signals that the company’s turnaround is likely to take longer, despite progress in margins and cost control.
Management also acknowledged continued weakness in Nike Sportswear, Jordan Brand and Greater China. The new Pace restructuring program is expected to generate about $2.5 billion in cumulative savings through fiscal 2031, but it also carries roughly $1.0 billion of expected pre-tax charges.
The premarket selloff suggests investors are focusing less on the quarter’s margin improvement and more on the depth and duration of the revenue decline, particularly in digital sales, China and key lifestyle categories.
