NIKE, Inc. (NYSE: NKE) on Oct. 1, 2026, reported fiscal 2027 first quarter results for the period ended Aug. 31, 2026. Revenue was $11.2 billion, down 4% on a reported basis and down 5% on a currency-neutral basis.
Alongside the results, Nike introduced Pace, an operating model transformation program. Pace builds on a cost realignment plan the company announced in March 2026 and is intended to support Nike's Sport Offense strategy while the company repositions NIKE Sportswear, Jordan Brand and its Greater China business.
#Nike's Gross Margin Expands As Revenue Declines 4%
NIKE Brand revenue was $11.0 billion, down 4%, as declines in Greater China and EMEA were partially offset by growth in North America. NIKE Direct revenue fell 8% to $4.1 billion, driven by a 13% drop in NIKE Brand Digital and a 5% drop in NIKE-owned stores. Converse revenue fell 28% to $263 million.
Gross margin expanded 60 basis points to 42.8%, which Nike attributed to lower warehousing and logistics costs. Selling and administrative expense decreased 3% to $3.9 billion, as a 6% reduction in operating overhead expense offset a 5% rise in demand creation expense tied to brand marketing around key sports events.
"We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management," Dave Denton, Executive Vice President and Chief Financial Officer, NIKE, Inc., said in the earnings release.
Net income was $712 million, down 2%, and diluted earnings per share was $0.48. The effective tax rate rose to 22.7% from 21.1% a year earlier, which Nike said was primarily due to foreign tax audit settlements recognized in the current year. The company returned approximately $610 million to shareholders through dividends, up 3% from the prior year.
Regionally, North America revenue grew 2% to $5.1 billion. Greater China revenue fell 22% on a reported basis and 26% on a currency-neutral basis, to $1.2 billion, with EBIT in the region down 34%. EMEA revenue declined 5%, while Asia Pacific and Latin America revenue declined 2% on a reported basis and was flat on a currency-neutral basis.
#Nike Launches Pace To Cut Costs Through Fiscal 2031
"The Sport Offense is driving measurable progress across our performance business, and we introduced Pace to help us accelerate and scale that momentum across NIKE," Elliott Hill, President and Chief Executive Officer, NIKE, Inc., said in the earnings release. "We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we're taking deliberate actions to strengthen those businesses the right way for the long-term."
Nike said Pace includes modernizing its global supply chain, establishing a new campus in India to support enterprise capabilities, realigning the business into three geographies and further streamlining the organization. The company expects the program to deliver approximately $2.5 billion in cumulative savings through fiscal 2031. Nike expects approximately $1 billion in pre-tax charges through fiscal 2031, primarily employee-related costs, in addition to approximately $300 million in severance costs recognized in fiscal 2026. About $300 million of the expected charges will be recognized in fiscal 2027.
Nike said the savings estimate is stated before the pre-tax charges and any future reinvestment, and that expected savings, charges and cash expenditures are estimates subject to assumptions including local law requirements in various jurisdictions, with actual results potentially differing, possibly materially, from those estimates.
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#Nike Expects Fiscal 2027 Revenue To Fall
Nike said it expects fiscal 2027 revenue to decline by a high-single-digit percentage, with the effective tax rate for the year expected in the mid-20% range, subject to changes in earnings mix and discrete tax items. Adjusted diluted earnings per share is expected to be between $1.15 and $1.35, a figure that excludes approximately $0.15 of restructuring expense tied to Pace.
Management's outlook points to a full year of further revenue pressure as Nike works through the Pace transformation, with the company citing risks including its ability to realize anticipated cost savings within the expected amounts or timeframe, potential delays in implementing the program due to local law requirements, and possible disruption to its business, operations or workforce as it executes the plan.