Nike is preparing for its fiscal 2027 first-quarter earnings report on October 1, with analyst attention focused on whether the company can demonstrate a genuine turnaround beyond isolated bright spots in its portfolio. The athletic apparel maker has shown improvement in certain areas, including mid-single-digit growth in its performance category and five consecutive quarters of double-digit growth in Running, which added roughly $1 billion in revenue during the previous fiscal year. North American wholesale revenue expanded 10% in the fourth quarter, driven by lower returns and reduced discounting rather than increased inventory placement.
However, significant headwinds persist across portions of the business. Sportswear declined in double digits during the fourth quarter, while both Sportswear and Jordan streetwear are expected to remain negative through fiscal 2027 despite anticipated second-half improvements. These struggling segments collectively represent approximately half of Nike’s revenue base. Greater China revenue contracted 17% in the fourth quarter, with management signaling that weakness is expected to continue in the near term as inventory is normalized.
Analyst assessments have become increasingly cautious. Stifel reduced its price target to $40 from $45 on September 21, citing expectations for a more promotional marketplace and tougher margin comparisons, while cutting fiscal 2027 and 2028 adjusted earnings per share estimates by $0.20 each. UBS anticipates a first-quarter earnings-per-share miss of five cents and sees potential for a broader full-year reset at Nike’s November investor day. Citi flagged elevated promotions and difficult North American comparisons as headwinds for the second quarter.
Positive catalysts include an estimated $300 million revenue contribution from the World Cup tournament and improved gross margins, which declined just 10 basis points year-over-year in the fourth quarter despite tariff pressures. Nike has exceeded its own revenue guidance for seven consecutive quarters. Nevertheless, the stock trades at a forward price-to-earnings multiple of 20.66, significantly higher than competitors including Adidas at 11.47 and On Holding at 14.27. Short interest has climbed to 75.59 million shares as of August 31, representing 7.92% of the float, while hedge fund ownership declined to 56 funds in the second quarter from 71 in the first.
The October 1 report faces elevated expectations to demonstrate that demand is broadening across the portfolio rather than merely concentrating in already-performing categories. Broader implications for Nike’s strategy will likely emerge during its November 16-17 investor day presentation.
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