Nike, Inc. is expected to report a sharp decline in earnings next week, marking its sixth consecutive quarter of decreased sales for its fiscal first quarter ended August 31. Several analysts expect Nike’s management team to deliver cautious guidance going forward.
The quarterly report is scheduled to be released after the market’s close on Tuesday, September 30.
Earnings are expected to reach 28 cents a share, down 60.0 percent from 70 cents in the prior-year Q1 period. Revenues are expected to be $11 billion, down 5.1 percent from the year-ago quarter.
Nike officials in June said they expected revenues for its first quarter to be down in the mid-single digits and gross margins to decline by 350 basis points to 425 basis points, including approximately 100 basis points of negative impact due to existing tariffs. The company projected SG&A dollars to increase in the low-single digits.
Nike suspended offering full-year guidance in October 2024 after considering the extensive turnaround steps expected (and needed) following the appointment of Elliot Hill as CEO, and analysts do not expect Nike to reinstate its full-year outlook in its reporting of first-quarter results.
Among analysts following the stock, Telsey’s Cristina Fernández expects Nike’s sales for the first quarter to decline 5.7 percent. In constant currency (CC), the investment firm reports a 6.7 percent decline in the quarter, with decreases of 15 percent in China, 6 percent in North America, 5 percent in EMEA, and 2 percent in APAC.
Fernández wrote, “U.S. retailers’ comments on Nike’s new running products, the expansion of Jordan and Nike at wholesale accounts, and consumer spending during back-to-school have been positive. However, we expect 1QF26 sales to be pressured by lower traffic to the digital channel due to reduced promotions YoY, unit reductions to key franchisees, and ongoing softness in China.”
Telsey said her team will be looking for signs of progress in innovation, particularly whether momentum has continued within Nike’s revamped running footwear assortment, what the likely next categories to show recovery are, and expectations for the NikeSkims brand launch. She will also look for signs that Nike is regaining wholesale distribution, including through Jordan brand launches at Academy Sports and Famous Footwear, inventory rationalization progress, and the impact of new tariffs.
In its September 23 note, Telsey reiterated its “Market Perform” rating while raising its price target to $75 from $70, after adjusting its price-to-earnings multiple higher.
Analysts at Barclays expect Nike to be able to top first-quarter consensus estimates because the estimates are “sufficiently low.” The investment firm expects Nike to post earnings of $0.35 a share in the quarter. However, Barclays remains cautious for the second half of Nike’s current fiscal year due to risks from a slower sales recovery and tariff pressure.
Analyst Adrienne Yih wrote in a September 18 note, “For FY1Q26, sentiment is clearly cautious, but we believe the event will be much less about the quarterly results, as a beat could be overshadowed by forward guidance. We believe that the quarter will be more focused on:
- What management expects for the holiday season.
- The updated outlook on the impact from tariffs following the 8/7/25 tariff rates and progress of its mitigation strategies; and
- The expectations for FY26 performance, with a focus on FY2H26. We believe consensus expectations for return to low-to-mid-single digit topline growth may be pushed out as they anniversary highly promotional clearing actions from last year’s Reset actions.”
Barclays reiterated its “Equal weight” rating and slightly upwardly adjusted its price target to $65 from $64.
In a September 19 note, Citi Research analyst Paul Lejuez raised his Q1 estimate for Nike from $0.25 to $0.30, citing stronger sales. He also raised his FY26 EPS estimate from $1.62 to $1.69 (vs. consensus of $1.61), driven by stronger sales, partially offset by weaker GM due to tariffs. He lifted his price target from $68 to $74.
Lejuez expects Nike to exceed first-quarter EPS estimates due to stronger sales and lower SG&A expenses. Lejuez wrote, “We expect mgmt to sound upbeat around new product innovation in performance running and reiterate their plan to get inventory clean by end of 2Q. Investors will be focused on consumer reception to new product this fall as a sign of whether NKE can build on its new product successes in 2H26. We expect investors to be focused on how spring ’26 orderbooks look vs positive single digit orderbooks this fall/holiday to gauge whether NKE’s cc sales can inflect positively in either 3Q/4Q.”
For the second quarter, Citi still expects Nike management to guide sales down to low single to mid-single digits and EPS in the range of $0.45 to $0.50 per share, down from analysts’ consensus of $0.51. Lejuez wrote, “While NKE is seeing some early wins in running, we remain cautious on the sustainability of topline growth without visibility into a return to growth in key areas like basketball/sportswear (>50 percent of sales). We see a balanced risk/reward in 1Q EPS.”
Morgan Stanley, in a September 23 note, reiterated its “Equal weight ” rating while slightly adjusting its price target on Nike to $70 from $64 on more favorable weighted average cost of capital (WACC) inputs.
Analyst Alex Straton expects Nike to report EPS in the first quarter in line with analyst targets, but she continues to think estimates for the second half of the fiscal year are too high. She wrote, “This, coupled with our less constructive recent channel checks & still-elevated valuation, leaves us more negative on our Equal-weight rating.”
Her team’s channel checks indicate that Nike hasn’t yet pulled back on inventory buybacks and is continuing to offer heavy discounts to retail partners, a sign that promotions likely remained elevated in the fiscal first quarter, like the prior quarter. Straton added that contacts indicated that “go-forward demand is shaping up worse than expected, meaning prolonged discounting activity could be ahead.”
Straton further noted that tariff rates “mostly increased across-the-board” since Nike provided first-quarter guidance in June.
In reiterating her Equal-Weight rating, she wrote, “We think the N-T set up & positive rate of change buoys the stock for now, keeping us, Equal-weight rated, but note that our next round of channel checks in December & 3Q results are key catalysts.”
In a note from September 17, Lorraine Hutchinson, at Bank of America Securities, reiterated her “Buy rating at a price target of $72.75. She adjusted her estimates for this year and next to reflect the higher tariffs.
Hutchinson said she expects Nike will provide 2Q guidance calling for sales to improve sequentially from a mid-single-digit decline in Q1, which she believes investors will view as another positive step towards a return to growth in the second half. She said back-to-school trends overall in the U.S. “were solid,” and Nike likely saw a benefit. Hutchinson reiterated her “buy” rating, saying, “A message of improving sales trends coupled with commentary that inventory is healthy in the channel and on track to be clean by the end of 1H would confirm our view that the recovery is progressing.”
Image courtesy Nike
