Nike reports Q1 revenue decline and lower net income

US sportswear giant Nike has announced its financial results for the first quarter ended August 31, 2026, reporting a revenue decline alongside lower net income.

Revenue declines across direct and wholesale channels

First quarter revenues for Nike were 11.2 billion dollars, down 4 percent on a reported basis and down 5 percent on a currency-neutral basis. Net income reached 0.7 billion dollars, down 2 percent compared to the same period in the previous year, while diluted earnings per share (EPS) stood at 0.48 dollars.

Nike brand revenues dropped 4 percent on both a reported and currency-neutral basis to 11 billion dollars, driven by lower sales in Greater China and Europe, Middle East and Africa (EMEA), which were partially offset by growth in North America. Nike Direct revenues fell 8 percent on a reported basis (down 9 percent currency-neutral) to 4.1 billion dollars, impacted by a 13 percent decrease in Nike brand digital sales and a 5 percent drop in company-owned retail locations. Nike brand wholesale revenues decreased 1 percent to 6.8 billion dollars. Meanwhile, footwear brand Converse, owned by Nike, recorded revenues of 263 million dollars, representing a 28 percent decrease due to declines across all markets.

Gross margin for the quarter expanded 60 basis points to 42.8 percent.

Introduction of Pace operating model transformation

Nike president and chief executive officer Elliott Hill stated: “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. We have more work to do in Nike Sportswear, Jordan Brand and Greater China, and we are taking deliberate actions to strengthen those businesses the right way for the long-term.”

Pace is an enterprise-wide transformation initiative designed to build upon a previous cost realignment plan announced in March 2026. The strategy encompasses modernising the global supply chain, opening a new corporate campus in India, reorganising into three operating geographies, and further streamlining organizational structure. Nike expects Pace to generate cumulative savings of approximately 2.5 billion dollars through fiscal 2031.

Fiscal 2027 outlook

Looking ahead to the remainder of fiscal 2027, Nike expects full-year revenues to decline in the high-single digits. Adjusted diluted EPS is projected to land between 1.15 dollars and 1.35 dollars, excluding approximately 0.15 dollars per share in restructuring expenses associated with Pace.