Nike reported earnings of 48 cents per share for the fiscal first quarter, exceeding analyst expectations of 43 cents, but its revenue of $11.21 billion fell short of the $11.32 billion consensus estimate. The company anticipates a high single-digit percentage decline in revenues for fiscal 2027 and has projected adjusted earnings per share between $1.15 and $1.35 for the current fiscal year.
As part of a restructuring plan aimed at long-term growth, Nike will also lay off more staff. Following the report, shares dropped 9% in premarket trading, bringing the stock price to approximately $32, a 45% decline year-to-date. Analysts express skepticism about Nike's recovery, citing significant pressures in its sportswear and footwear lines, particularly in the crucial China market.
Wells Fargo analyst Ike Boruchow noted that the outlook remains bleak, with a 25% cut to earnings per share estimates and a $30 price target, indicating further downside potential.
Other analysts echoed similar sentiments, with Goldman Sachs maintaining a neutral stance and a $30 target, while Morgan Stanley and Bank of America expressed more pessimistic views, suggesting that visibility on a sales turnaround is limited.
Bernstein, however, maintained an outperform rating with a $45 target, acknowledging the need for Nike to rebuild credibility with investors after multiple guidance cuts