Nike goes into Thursday's result with one broker calling for two more years of pain

Nike

Nike reports its first quarter after Thursday's close in New York. The shares are down about 44% this year. On Friday, six days out, Bank of America cut them to underperform from neutral.

The argument is about timing rather than trouble. Analyst Lorraine Hutchinson pushed her expected sales recovery from spring 2027 out to the 2028 financial year, and cut her 2027 earnings estimate 11% to US$1.43 a share. That is roughly 14% below consensus.

China is the sore spot. Revenue in Greater China fell 17% in the quarter Nike reported in June. North American wholesalers are also still working through unsold stock, which pushes out the next order.

Chart: Nike's revenue was US$46.40bn in the year to May, against US$51.36bn two years earlier. Nike's revenue in each financial year to May, 2017 to 2026, in US$bn. The first quarter of its new year is reported on Thursday. — This story’s chart of the day: the numbers, the dark version and the animated version are on its own page. The chart’s page →

Consensus for Thursday is revenue of about US$11.3 billion and adjusted earnings of 44 US cents a share. The line that has not moved yet is the full-year margin target, and that is the one to read first.

The tell

Greater China. Thursday gives Nike a chance to answer the note, and what answers it is whether that 17% fall has started to shrink. I'd treat anything said about spring 2027 as a forecast until the China line turns.

This story ran in The Narrow Climb Monday 28 September’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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Friday 2 October Nike's China sales fell 22% and its outlook undershot even the bears

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