NKE Stock Slumps About 9% After-Hours On A Soft Full-Year Forecast: CEO Says The Fix Will Take Time

• CFO Dave Denton said operating profit would fall by a greater percentage than revenue in fiscal 2027, and that the supply cuts would pressure revenue for the rest of fiscal 2027 and into fiscal 2028.
• Nike Sportswear, just under half of quarterly revenue, saw sales fall by a low double-digit rate.
• Jordan Brand, 13% of the business, saw sales fall by a mid-teens rate in the quarter.

Shares of Nike Inc. (NKE) slumped 9% after hours on Thursday after CEO Elliott Hill said the fix in Nike Sportswear, Jordan Brand, and Greater China businesses “will take time” and issued a full-year forecast that disappointed Wall Street.

Nike earned $0.48 a share in the fiscal first quarter, ahead of the $0.43 analysts expected, on revenue of $11.2 billion, down 4% and short of a roughly $11.3 billion consensus.

It then guided fiscal 2027 revenue to a high-single-digit decline and adjusted earnings to $1.15 to $1.35 a share, excluding about $0.15 of restructuring costs. Analysts had been looking for closer to $1.67. Chief financial officer Dave Denton said operating profit would fall by a greater percentage than revenue in fiscal 2027, and that the supply cuts would pressure revenue for the rest of fiscal 2027 and into fiscal 2028.

NKE's Forecast That Pushed The Recovery Out

Denton, on his first earnings call, said the outlook was an initial read after several weeks inside the company, and that Nike would update it at an investor day in November. The second quarter alone carries a roughly 4-percentage-point headwind from a tough comparison with last year’s promotions in Europe and a heavier wholesale sell-in in North America.

“We are not at a standing start,” he said. “Significant and valuable work has already been done.”

Cutting Supply To Rebuild Demand

Chief executive Elliott Hill said the performance business is growing, but not yet large enough to offset the pressure in sportswear, Jordan, and China.

Nike Sportswear, just under half of quarterly revenue, saw sales fall by a low double-digit rate. A planned cut of nearly 50% in Dunk sales took about $200 million out of the quarter, and older sportswear shoes sold through worse than expected. Jordan Brand, 13% of the business, saw sales fall by a mid-teens rate.

Hill said Nike had asked its retro shoes to do too much and would cut the volume and frequency of launches. “When consumers see the Jumpman, it should feel special. It should feel earned,” he said.

Greater China sales fell 26% on a currency-neutral basis. Nike is pulling product out of discount channels and concentrating digital sales on its own flagship storefronts on Tmall, JD.com, and Douyin. Hill said that cleanup will take multiple seasons.

Nike Performance Is Growing. It Is Not Enough.

The performance portfolio, which grew to $16 billion last year, saw sales rise at a high single-digit rate in the quarter. Running sales were up double digits, and Nike said it has nearly tripled its share of max-cushion shoes. Global football sales grew by a strong double-digit rate in every region, and World Cup team-kit sales doubled versus 2022. Training, tennis, and golf sales also grew double digits.

NKE's $2.5B Reset Plan

Nike expects about $2.5 billion in savings, mostly in fiscal 2029 and 2030, at a cost of about $1 billion, on top of $300 million of severance already booked. It is opening a campus in Bengaluru, India, folding four geographic divisions into three by pairing North America with Latin America and Asia-Pacific with Greater China, and cutting roles over time. The new structure is aimed at fiscal 2028.

How Did NKE Retail Traders React?

On Stocktwits, retail sentiment around NKE stock stayed ‘bullish’ over the past 24 hours, while message volume rose from ‘high’ to ‘extremely high’ levels.

A Stocktwits user termed the selloff a “lifetime opportunity to buy.”

Another voiced hopes for a bounce back in the stock, citing the company’s reputation.

A third user, however, highlighted competition and the rising cost of living.

NKE stock has fallen 45% year-to-date. 

Read More: Vylor Takes Corteva’s S&P 500 Seat, Twilio Set To Replace Warner Bros. Discovery — Both Stocks Rise After-Hours

For updates and corrections, email newsroom[at]stocktwits[dot]com.