This athletic apparel giant is scheduled to report earnings later this week, and Nike (NKE) may once again face negative news.

Evercore ISI analyst Michael Binetti released a new research note titled "Fiscal First Quarter Update Could Be Another Reset Moment." Binetti said there is plenty for the market to worry about regarding Nike.

"Nike's previous guidance showed continued weakening revenue growth: fiscal fourth quarter 2026, the quarter ending May 2026 for which results have already been disclosed, saw revenue decline 1% year over year; fiscal first quarter 2027 revenue will fall to a low-to-mid single-digit year-over-year decline; and fiscal second quarter 2027 will weaken further. Nike has already significantly lowered its organic performance assumptions for the China market and said it will launch innovative products in spring 2027. Taken together, current market consensus believes company revenue will bottom in the first half of fiscal 2027, down 4% year over year, and return to flat year over year in the second half of fiscal 2027. But since the fourth quarter earnings call, we believe retailers have already canceled orders or reduced purchase volumes for Nike's spring 2027 products, which would further weigh on Nike's revenue outlook for the second half of fiscal 2027." Binetti added: "Nike has signaled that it will likely wait until the November analyst meeting to reissue full-year fiscal 2027 guidance. But with a new chief financial officer about to take office, this earnings call may be a suitable time to send a signal by lowering second-half fiscal 2027 revenue expectations. This is especially true if the company wants investors to focus on the long-term turnaround story at the important November meeting rather than being distracted by near-term guidance cuts."

The broader backdrop for Nike's upcoming earnings report is already very difficult. According to Yahoo Finance data, since the previous earnings report on May 28, Nike shares have fallen about 25% cumulatively and are now near a 52-week low; they have plunged 53% from their stage high a year earlier. Compared with its all-time high in 2021, the company's total market value has nearly halved. Nike intraday quote as of 12:37:55 p.m. U.S. Eastern Time, with trading still underway: $36.51, up $0.76, or +2.11%.

Football superstar Kylian Mbappe ended his long-term partnership with Nike this month and announced a deal with sports brand On. Last week, Nike was removed from the S&P 100 index, ending 18 years as an index constituent. At the end of August, major sporting goods retailer Dick's Sporting Goods issued a pessimistic earnings warning, partly because of aggressive discounting by Nike to clear unsold products. At the end of June, Nike reported fiscal fourth quarter 2026 results: revenue of $11 billion, down 1% year over year on a reported basis and down 4% year over year on a currency-neutral basis. Although diluted earnings per share of $0.72 appeared to improve sharply year over year, that was mainly due to a huge one-time benefit of $0.52 per share from tariff refunds, creating a clear distortion. Chief Executive Officer Elliott Hill returned to Nike in October 2024, and the company recently completed a chief financial officer change as well, while the stock has remained under pressure. Shifting consumer sneaker preferences, increasingly cautious consumers, and rivals such as On pressing forward have combined to hinder the business, and the dawn of a turnaround has yet to appear. Nike previously forecast that fiscal first quarter 2027 revenue would decline by a low-to-mid single-digit percentage year over year; excluding the tariff refund benefit, earnings per share would remain flat over the next three quarters. Stifel analyst Peter McGoldrick said in a preview note last week: "We remain concerned about the risk-reward ratio: consumer demand for new products is insufficient, while the basketball classic product line, which accounts for 18% of total revenue, continues to shrink. With a new CFO arriving and an investor meeting on November 16-17, management has little incentive to raise expectations in the near term. Based on 17 times expected price-to-earnings for calendar 2027, while the median valuation for the footwear industry is only 11 times. If the turnaround progress is delayed again, there is downside risk to the company's valuation."