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