Nike lost over $3 of Greater China sales for each $1 North America added
Nike now expects fiscal 2027 revenue to fall after $11.21 billion in first-quarter sales missed estimates and Greater China sank 26% currency-neutral. Its Pace overhaul adds about $300 million of charges this fiscal year, with role cuts from 2027 and savings stretching to 2031.
The Investor · Invest desk
What happened
- Earnings per share of 48 cents beat the 43-cent estimate, even as net income fell 2% to $712 million.
- Gross margin widened 60 basis points to 42.8%, a gain Nike attributed in part to lower warehousing and logistics costs.
- Pace is projected to save about $2.5 billion by the end of fiscal 2031, against roughly $1 billion of pre-tax charges over the same window.
- Nike guided fiscal 2027 adjusted diluted earnings per share to a range of $1.15 to $1.35.
- Nike shares fell roughly 3% to 4% in extended trading on Thursday after the report.
Why it matters
- What it costs cost Earnings keep paying for Pace after this year, with about $700 million of its charges still to be booked between the end of fiscal 2027 and the end of fiscal 2031.
- Who has to decide decision Nike has picked pricing control over near-term China volume, and Topsports, its largest mainland distributor, says it backs the long-term direction despite short-term pressure.
- What it limits constraint After a 76% five-year fall the stock still trades at 21 times forward earnings by a Seeking Alpha contributor's count, so the price assumes earnings growth that a longer revenue decline would undercut.
Next story · Invest · 3d ago
Albertsons pulls its financial guidance until its sweeping business review is overConfirmed2 publishers
Working back to the year-earlier figures gives each region a dollar size. Greater China's $1.18 billion, after a 22% reported fall, implies about $1.51 billion a year ago, a loss of roughly $333 million in a single quarter [3][19]. North America's 2% rise to $5.13 billion implies a gain of roughly $101 million [9][20]. China is about a tenth of quarterly sales and North America about 46% [23]. Even so, China took away more than three dollars for every dollar North America added [21]. Converse, down 28% to $263 million, gave back about $102 million on its own, roughly all of the North American increase [15][25].
The earnings beat came from cost. Revenue missed the $11.32 billion consensus by about $110 million, roughly 1% [1][14]. A Seeking Alpha contributor put first-quarter revenue down 4%, with Europe weak as well as Greater China, and wrote that increased demand-creation spending "failed to stem revenue losses" [4][31].
Pace returns about $2.50 of savings for each dollar of charges, a net $1.5 billion by fiscal 2031 [16]. Thirty percent of the charges land in the first year [26]. Their 15-cent hit is about 12% of the $1.25 midpoint of guidance [17][27]. Besides cutting roles, the program reorganizes Nike into three geographies, modernizes the supply chain and adds a campus in India [5]. The guidance also implies a slower rest of the year. At the midpoint, the first quarter's 48 cents leaves about 77 cents for the other three quarters, roughly 26 cents each and about half the opening quarter's rate [22]. The quarterly and full-year figures may not be on the same adjusted basis, so that split is approximate.
The case for a better outcome starts in China, where part of the fall is Nike's own choice. Nike is cutting ties with thousands of online distributors from January [11]. Shoppers are being steered to Nike's own digital properties and to storefronts on Tmall, JD.com and Douyin, with the stated aim of reducing pricing inconsistency [11]. North America wholesale grew 9% [9], or rather, wholesale grew 9% inside a region that grew 2%, so the rest of North American revenue grew more slowly than 2% [24]. Pace savings could also arrive ahead of the 2031 end date [6]. I think Nike's own sequence holds on this evidence: the first slice of charges and the guided sales decline both fall in fiscal 2027 [2][17]. Nike did not say when revenue growth returns. The view is wrong if Greater China's currency-neutral decline narrows sharply once the distributor cut has run for a year, since that would make most of the 26% a channel decision [3].
Elliott Hill, Nike's president and chief executive, grouped China with two of the company's own lines. "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," Hill said in a statement [10].
What to watch
- Whether Nike sizes the Pace role reductions due from 2027 and says which of the three new geographies absorbs them.
- A regional breakdown for Europe, the other weak market in the Seeking Alpha account, in Nike's next quarterly report.
- Topsports' own results, as the first outside measure of how much short-term pressure the China channel cut puts on wholesale partners.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence74
- Adoption
- Not scored
- Hype gap+5
- Incentives35
- Confidence68
Perspective Coverage
4 publishers- Builder
- Builder 4%
- Operator
- Operator 36%
- Investor
- Investor 60%
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Nike posted first-quarter sales of $11.21 billion; analysts had expected $11.32 billion, according to CNBC.
- [2]
Nike cut its full-year outlook and now expects revenue to fall in fiscal 2027.
- [3]
Greater China revenue dropped 22% on a reported basis and 26% on a currency-neutral basis, to $1.18 billion.
- [4]
Q1 revenue declined 4%, with significant weakness in Europe and Greater China; guidance was notably below consensus.
- [5]
Nike's Pace operating model overhaul will result in fewer roles beginning in 2027 and includes supply chain modernization, a reorganization into three geographies, and a new campus in India.
- [6]
Pace is projected to generate around $2.5 billion in total savings by the end of fiscal 2031, with pre-tax charges of roughly $1 billion anticipated over the same window.
- [7]
Earnings per share of 48 cents topped analyst expectations of 43 cents, according to CNBC, but net income fell 2% to $712 million.
- [8]
Gross margin improved 60 basis points to 42.8%, with the company citing reduced warehousing and logistics expenses as a contributing factor.
- [9]
North America revenue rose 2% to $5.13 billion, with wholesale sales in that market up 9%.
- [10]
"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," President and Chief Executive Officer Elliott Hill said in a statement.
- [11]
Nike announced plans to cut ties with thousands of online distributors in China starting in January, directing shoppers to Nike-owned digital properties and dedicated storefronts on Tmall, JD.com and Douyin; Nike said the strategy aims to reduce pricing inconsistency and strengthen its brand image.
- [12]
Topsports, Nike's largest distributor in mainland China, said the move would bring short-term pressure but supported the long-term direction.
- [13]
Nike's share price has shed more than 40% of its value since the start of 2026.
- [14]
First-quarter revenue missed the consensus by about $110 million, roughly 1%.
- [15]
Converse revenue fell 28% to $263 million.
- [16]
Pace projects about $2.50 of savings per dollar of charges, a net $1.5 billion by the end of fiscal 2031.
- [17]
Nike expects approximately $300 million in Pace charges to be recognized in fiscal 2027, reducing adjusted diluted EPS by roughly 15 cents.
- [18]
Nike expects fiscal 2027 adjusted diluted EPS in the range of $1.15 to $1.35.
- [19]
Greater China revenue a year earlier was about $1.51 billion, so the quarter's reported decline was roughly $333 million.
- [20]
North America revenue a year earlier was about $5.03 billion, so the quarter's gain was roughly $101 million.
- [21]
Greater China's revenue loss was about 3.3 times North America's revenue gain in the quarter.
- [22]
At the guidance midpoint, the first quarter's 48 cents leaves about 77 cents for the remaining three quarters, roughly 26 cents each, about half the first quarter's rate.
- [23]
Greater China was about 10.5% of first-quarter sales and North America about 46%.
- [24]
Because North America revenue grew 2% while its wholesale component grew 9%, the remaining North American revenue must have grown less than 2%.
- [25]
Converse revenue fell by about $102 million from a year-earlier figure of about $365 million.
- [26]
About 30% of Pace's total charges fall in fiscal 2027.
- [27]
The 15-cent Pace charge is about 12% of the $1.25 midpoint of fiscal 2027 adjusted EPS guidance.
- [28]
About $700 million of Pace charges remain to be booked after fiscal 2027, through the end of fiscal 2031.
- [29]
Nike stock fell roughly 3% to 4% in extended trading Thursday.
- [30]
Nike stock has declined 76% over five years and still trades at 21x forward earnings.
- [31]
Expense management improved margins, but increased 'demand creation' spending failed to stem revenue losses.
Sources
4 independent publishers whose own reporting we read for this story.
- channelnewsasia.comNike plans more job cuts to boost sputtering turnaround, forecasts steep revenue drop
1 article · October 1, 2026
- en.sedaily.comNike to Cut Jobs as China Sales Plunge 22%
1 article · October 1, 2026
- qz.comNike cut its full-year revenue outlook after missing first-quarter estimates
1 article · October 1, 2026
- seekingalpha.comNike Q1: The Company Of The Past Is Gone
4 articles · October 2, 2026
Topics and entities
Topics
- China consumer market
- Corporate earnings
- Corporate Restructuring
- Sportswear industry
Entities
- Elliott Hill
- Neil Saunders
- LSEG
- GlobalData
- Douyin
- JD.com
- Nike
- Laurent Vasilescu
- BNP Paribas