Nike Facing Another Reset as Weakness to Persist Into Fiscal 2028, BofA Says

MT Newswires Live
Oct 02

Nike (NKE) is facing another reset, with weakness in Sportswear, Jordan Brand and Greater China expected to persist into fiscal 2028 amid weaker sell-through and excess inventory, limiting visibility on a sales turnaround, BofA Securities said in a Friday note.

Management now expects fiscal 2027 sales to decline by a high-single-digit percentage, with adjusted earnings per share of $1.15 to $1.35 versus a market consensus of $1.67.

Nike introduced a $2.5 billion gross cost-savings program through fiscal 2031 and reaffirmed its dividend commitment. Sportswear sales, which represented about 50% of Q1 revenue, fell at a low-double-digit rate, while Jordan Brand sales declined at a mid-teens rate.

Performance was a bright spot, growing at a high-single-digit rate in the first quarter, with running, football, tennis and golf each posting double-digit growth. BofA expects Nike's innovation pipeline to be a focus at its November investor day, the report added.

BofA reiterated its underperform rating on the stock and lowered its price target to $24 from $30.

Nike shares were down more than 5% in Friday trading.

Price: 33.23, Change: -1.92, Percent Change: -5.47

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