Nike Q4: Quality over Quantity

Research evidence excerpt

Nike Q4: Quality over Quantity

Aneesha Sherman +1 917 344 8457 aneesha.sherman@bernsteinsg.com 1 July 2026

GUIDANCE AND OUTLOOK

Near-term continues to be challenged through the end of the calendar year, i.e. H1 FY27. Guidance for calendar 2027

remained unchanged on an EPS basis (flattish EPS growth for the 9-month period including Q4 + H1, excluding the Q4 tariff

benefit) but with slower revenue growth and stronger margin recovery. Revenues for H1 are expected to be negative LSD-

MSD due to a combination of lower sell-in, tough compares in Q2 especially, and weaker spending environment. But margins

are expected to turn positive by Q2 with GM positive by Q1 (one quarter ahead of prior guide) aided by improving marketplace

health, lower discounts, tighter inventory management and supply chain productivity initiatives.

Into calendar 2027 (H2 FY27), Mgmt sounded more optimistic. CEO Elliott Hill reiterated that the “Win now” transformation

program remains on track to be sunset by end of CY26, with the company transitioning fully toward the Sport Offense

framework into CY27. The business is already showing signs of higher quality with higher full-price selling, lower returns from

vendors, and even China showing positive signs in marketplace inventory and sell-through (despite sell-in still undergoing a

correction). Gross margins appear to have stabilized, with Q4 underlying GM flat YoY and North America discount levels coming

in lower than expected. Several structural cost initiatives should begin to contribute in FY27 to both GM and SG&A leverage,

helping margins inflect ahead of sales and continue to move upward over the medium-term, with Mgmt remaining confident of

hitting double-digit margins medium-term (we model just about double digits in FY28).