NIKE (NKE) Q1 FY2027 Earnings Call: Q&A Summary

Q: Simeon Siegel with Guggenheim Securities asked Elliott Hill to frame the size of performance versus Sportswear and Jordan in the U.S. and explain how North America still grew revenues despite negative commentary.

A: Elliott Hill, CEO, responded that performance grew high single digits globally in Q1 driven by football, running, training, basketball, tennis, and golf, building on a $16 billion business in fiscal 2026. North America grew 2% led by running, global football, and basketball with solid sell-through across wholesale partners.

Q: Simeon Siegel with Guggenheim Securities asked Dave Denton for his confidence in the guidance numbers and how much he has been able to touch in his short time at the company.

A: David Denton, CFO, stated that the company performed a bottom-up comprehensive business and financial plan review, pressure testing trends and risks. He expressed high confidence that the guidance range reflects the best assessment of the business today and that teams are accountable for delivering.

Q: Brooke Roach with Goldman Sachs asked for context on the magnitude and cadence of pressure expected in Greater China relative to the 26% decline in Q1 and if additional strategic actions are necessary.

A: Elliott Hill explained that Greater China is undergoing a marketplace reset to become more premium and culturally relevant by cleaning up digital distribution, anchoring around fewer flagships like Tmall, JD, and Doyue, and releasing local product creations starting in October. David Denton added that guidance assumes China revenues will get worse for the balance of the fiscal year due to these deliberate reset actions.

Q: Jay Sole with UBS Securities asked for more details on Q2 revenues, gross margin, and fiscal 2027 gross margin expectations given year-over-year comparisons.

A: David Denton stated that specific gross margin guidance for the full year is not provided, noting that supply chain cost savings are being offset by discounts and marketplace resets. He reiterated that Q2 growth rates will face pressure from tough comparisons against European Cyber Week and North American sell-in activities from last year.

Q: Bob Drbul with BTIG asked for clarity on the decision to let Mbappe go and the game plan for signature basketball following the addition of new talent.

A: Elliott Hill acknowledged a great two-decade relationship with Mbappe and wished him success, while emphasizing the strength of NIKE's remaining football roster, federations, and boots. For basketball, he highlighted the successful launch of the Caitlin 1 signature shoe across 5,000 doors and strong momentum in the women's and GT series businesses.

Q: Samuel Poser with Williams Trading asked about regional sales trends for the year, the target speed for the Pace program, and whether sub-$100 family channel products live mostly in sportswear.

A: Elliott Hill explained that the core footwear product line priced at $65 to $85 cuts across performance sports like running, basketball, and training, as well as sportswear. He added that the Pace program is designed to scale the sport offense by evolving the supply chain, establishing a Bengaluru capability center, moving from four to three geographies, and reshaping the workforce.

Q: Alexandra Straton with Morgan Stanley asked why challenges in Jordan, China, and sportswear have persisted and what gives management confidence in the revised strategies.

A: Elliott Hill stated that meaningful change takes time at NIKE's scale, and the turnaround is happening one community and country at a time. He noted that breaking down sportswear into distinct consumer segments, restoring the Jordan scarcity model, and leading with sport and innovation in China are the correct corrective actions.

Q: Matthew Boss with JPMorgan asked about the level of potential pain before gain, which segments will moderate further, and when Pace transformation work will bear fruit on the P&L.

A: David Denton answered that sportswear, Jordan, and China will experience continued pressure through the balance of the year and into fiscal 2028 to achieve long-term health. He noted that supply chain actions are already bearing fruit in gross margins, with maximum savings from Pace expected in fiscal years 2029 and 2030.

Q: Michael Binetti with Evercore ISI asked about the path to total company revenue positivity in fiscal 2028 and the priority of the dividend given cash model and payout ratio dynamics.

A: David Denton affirmed that the dividend remains a very significant priority in capital allocation under all scenarios, with support for maintaining and growing it over time. He advised holding broader revenue and financial algorithm questions for the upcoming Investor Day in November.