Nike Stock Craters on $1.15 EPS Guide vs. $1.65 Estimate
Nike stock falls 9.6% after FY27 EPS guidance of $1.15–$1.35 demolishes the $1.65 consensus. Goldman targets $30. Here's what traders need to know.
Key Points
- Nike's FY27 EPS guidance of $1.15–$1.35 landed $0.30–$0.50 below the $1.65 Street consensus, triggering a 9.6% pre-market selloff to $31.79.
- Greater China revenue collapsed 26% year-over-year, gutting the growth narrative that justified premium multiples for the better part of a decade.
- Watch Goldman Sachs's new $30 price target — it now sits below current levels, meaning the largest risk remains another leg down if sell-side consensus migrates toward that floor.
Nike's new fiscal 2027 EPS guidance range of $1.15–$1.35 hit the market like a wrecking ball Thursday night, arriving $0.30 to $0.50 below the $1.65 analyst consensus and sending shares down 9.6% in pre-market trading to $31.79. This is not a miss you explain away. It is a fundamental reset of what Nike is worth — and at $35.15 heading into the print, the stock was already trading just pennies above its 52-week low of $35.02.
The Numbers That Broke the Story
The fiscal Q1 earnings card had one genuine bright spot: adjusted EPS of $0.48 beat the $0.44 consensus. In any other quarter, that six-cent outperformance would have been worth a modest pop. Instead, it was buried under a revenue line of $11.21 billion that missed the $11.35 billion estimate and forward guidance so far below expectations that no amount of cost discipline could paper over it. Management guided for high-single-digit revenue declines in the coming period — a forecast that turns the turnaround thesis from a question of timing into a question of survival for the bull case.
Gross margin told a more complicated story. At 42.8%, margin expanded 60 basis points year-over-year, a result of supply-chain actions that are genuinely working. But margin improvement in the face of accelerating revenue decline is not a recovery — it is a company optimizing around a shrinking business. North America, Nike's most important geography, managed only 2% growth, a number that would have been disappointing in a strong macro environment and is genuinely alarming with the brand burning through marketing spend at scale.
China Is the Open Wound
Greater China revenue fell 26% year-over-year. That number deserves to be read twice. Twenty-six percent. China was supposed to be the market where Nike's global brand cachet held pricing power and where an expanding middle class provided a structural growth tailwind for years. Instead, the combination of domestic competitor pressure from names like Anta and Li-Ning, lingering consumer nationalism dynamics, and Nike's own execution failures have turned what was a crown jewel into an active liability.
The China collapse is not peripheral to the Nike investment thesis — it is central to it. Bulls who held through a 51% decline over the past year did so in part because China was supposed to recover. Nike stock has now lost more than half its value in twelve months, and the Q1 China print provides no evidence that the trough is near. CEO Elliott Hill's internal letter — "This work will result in fewer roles across Nike, and I don't take that lightly" — signals that the company itself is not operating from a position of confidence about when volume returns.
The Jordan Brand and Sportswear segments, both flagged by Jefferies as ongoing problem areas even as the bank maintained its Buy rating with a reduced $60 target (down from $75), represent Nike's lifestyle and culture businesses — historically its most margin-rich and brand-defensive categories. If those are struggling alongside China, the revenue mix is deteriorating in exactly the wrong direction: declining in high-margin discretionary while cost restructuring holds the gross margin line. That is not a growth company; that is a company in managed decline trying to buy time for a strategy to work.
The Restructuring Math and What It Means for Price
The "Pace" initiative is the headline response to all of this. Nike has outlined approximately $2.5 billion in cumulative cost savings through fiscal 2031 — a five-year window that should make any investor pause. Savings that take five years to materialize provide cold comfort when the revenue trajectory is deteriorating now. The cost of the program is roughly $1 billion in pretax charges, with approximately $300 million hitting fiscal 2027 alone, which means the EPS guide of $1.15–$1.35 is absorbing real restructuring pain in the near term before any of the savings accrue.
Goldman Sachs cut its price target to $30 from $38 while keeping a Neutral rating. That is the number every trader needs to internalize this morning: Goldman's target is now below where the stock is trading. When the most widely-followed sell-side house on the Street sets a target below the current price on a Neutral rating, the message is unambiguous — there is no margin of safety here, and the next consensus move is likely lower, not higher. Analyst reactions published Friday morning reflect a Street that is still in the process of resetting models, which means additional price target cuts are probable over the next 48 to 72 hours as every firm works through the new guidance.
CFRA's Zach Warring, who maintains a Buy, offered the most direct characterization of the situation available from a bull: "This is a quarter you'd expect from a new CEO three or four quarters in, but not two years in." Elliott Hill has now been in the chair long enough that the newness discount has expired. The market is no longer willing to extend goodwill on the turnaround timeline. Warring's note that "valuations and expectations have been reset" is the polite version of what the stock price is saying loudly.
What Traders Watch Next
The immediate technical question is whether $31.79 — the pre-market print — holds as a floor or represents the first trade in a new down leg. The prior 52-week low of $35.02 is already broken on a closing basis once the market opens and processes this print. With Goldman at $30, the next meaningful technical support level traders will watch is the $28–$29 zone, which corresponds to multi-year support from the 2017–2018 consolidation range.
The calendar matters here too. Nike does not report again until late December for fiscal Q2. That means three full months of trading with no fundamental catalyst to reset the narrative upward — three months during which the China deterioration continues, the Pace restructuring charges accumulate, and sell-side models bleed lower as analysts incorporate the new reality. Any short-term bounce should be treated as a selling opportunity rather than a signal that the worst is priced in. Goldman's $30 target is not a floor; it is a current best estimate from a shop that has now twice been too optimistic on this stock. The real floor question is whether earnings power stabilizes closer to $1.15 or overshoots to the downside. Until Nike shows a China print that isn't catastrophic — or North America reaccelerates to something above 2% — the pain trade remains lower.
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