Nike first-quarter revenue falls to $11.2 billion; outlines multi-year restructuring plan

NIKE, Inc. (NKE) reported financial results for its first quarter ended August 31, 2026, alongside an expansion of its multi-year operating model transformation.

Here's how the company did:

• Revenue: $11.21 billion vs. $11.72 billion a year earlier
• Net income: $712 million vs. $727 million a year earlier
• Diluted earnings per share: $0.48 vs. $0.49 a year earlier
• Gross margin: 42.8% vs. 42.2% a year earlier

Total revenues fell 4% on a reported basis and 5% on a currency-neutral basis. Gross margin expanded 60 basis points, supported by lower warehousing and logistics costs. Selling and administrative expenses decreased 3% to $3.9 billion.

"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," said Elliott Hill, President and Chief Executive Officer, NIKE, Inc. "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."

"We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management," said Dave Denton, Executive Vice President and Chief Financial Officer, NIKE, Inc. "As we move forward, we remain focused on strengthening the health of our product portfolio, improving productivity across the enterprise and allocating resources with discipline to support long-term shareholder value."

Nike Brand revenues were $11.0 billion, down 4% on a reported and currency-neutral basis. NIKE Direct revenues dropped 8% to $4.1 billion, driven by a 13% decrease in NIKE Brand Digital and a 5% decrease in NIKE-owned stores. Converse revenues fell 28% to $263 million.

In North America, revenues rose 2% to $5.13 billion. In Europe, Middle East and Africa, revenues fell 5% to $3.18 billion. In Greater China, revenues dropped 22% to $1.18 billion. In Asia Pacific and Latin America, revenues fell 2% to $1.46 billion.

Inventories stood at $7.85 billion, down 3% from a year earlier. Cash and equivalents and short-term investments totaled $8.4 billion. The company returned approximately $610 million to shareholders through dividends during the quarter.

Restructuring program and outlook

The company announced Pace, an operating model transformation that includes and builds upon a previous cost realignment plan from March 2026. The program involves optimizing the global supply chain, establishing a new campus in India, realigning the operating model into three geographies, and further streamlining the organization.

The board of directors approved steps expected to result in pre-tax charges of approximately $1.0 billion through fiscal 2031, consisting primarily of employee-related costs. This is in addition to approximately $0.3 billion of severance costs recognized in fiscal 2026. The company expects approximately $0.3 billion of the new charges to be recognized in fiscal 2027.

Nike expects the program to deliver approximately $2.5 billion in cumulative savings through fiscal 2031, before pre-tax charges and reinvestment.

For fiscal 2027, the company expects revenues to decline in the high-single digits. Adjusted diluted earnings per share are expected to range from $1.15 to $1.35, excluding approximately $0.15 of restructuring expenses related to Pace. The effective tax rate for fiscal 2027 is expected to be in the mid-20 percent range.