research report · NKE

Nike, Inc.

Johannes Vermeer, Woman Holding a Balance, c. 1664, detail · National Gallery of Art

Viridis’s deep research report, written Oct 25, 2026 from its quarterly report (10-Q for the quarter ended Aug 31, 2026, filed Oct 2, 2026). Written and checked with Anthropic’s Claude models.

your email, no card; what you get

business trajectory

Deteriorating

worse on balance: sales, margins, cash or competitive position

financial resilience

Adequate

funded for about two years, partly by routine borrowing or new issuance

Judgments of the business from its filings, not of its shares: no valuation, no advice.

bottom line

NIKE is financially sound, but its turnaround is lengthening and its earnings base is shrinking. First-quarter fiscal 2027 revenue fell 4% to $11.2 billion. Management's first full-year outlook calls for revenue down high single digits and adjusted earnings per share (EPS) of $1.15–$1.35, against $2.10 of reported EPS in FY26. That outlook implies the rest of the year will be weaker than the first quarter. The balance sheet can absorb this, with $8.4 billion of cash and investments against $7.9 billion of debt. But operating cash flow no longer covers capital spending plus a dividend of roughly $2.4 billion a year.

what changed this quarter

  • Revenue was $11,213M vs $11,720M, down 4% reported and 5% currency-neutral. Currency-neutral, Greater China fell 26%, Converse fell 28% and North America grew 2%.
  • Gross margin was 42.8%, up 60 basis points. EBIT (earnings before interest and taxes) was $907M vs $904M, and diluted EPS was $0.48 vs $0.49.
  • This is the first full-year guidance: revenue down high single digits, a tax rate in the mid-20s%, and adjusted EPS of $1.15–$1.35 excluding about $0.15 of restructuring.
  • On Oct 1 the company announced "Pace": about $1.0B of charges through FY31 (about $0.3B in FY27) for about $2.5B of cumulative savings.
  • David Denton became CFO on Aug 17. After the chief accounting officer left on Sept 4, he is also principal accounting officer.

in the full report

Its findings, each with the evidence, the strongest counterpoint and what would prove it wrong:

  • The turnaround is taking longer, and guidance implies a weaker rest of the year
  • Margins improved on costs, not pricing
  • Operating cash flow does not cover the dividend
  • Pace savings are back-loaded and partly earmarked for reinvestment

Then its finances, the quality of its earnings, its management, the case for and against, and what to watch, its claims cited to the filings and checked against them.

read it whole

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