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Nike First-Quarter Earnings Likely to Miss Street Views Amid Sales Slowdown, UBS Says

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Nike First-Quarter Earnings Likely to Miss Street Views Amid Sales Slowdown, UBS Says

Nike's (NKE) fiscal first-quarter earnings could miss Wall Street's projections amid deteriorating global sales trends, which could weigh on the company's top-line in the coming years, UBS Securities said Thursday.

The brokerage cut its bottom-line estimates for the sportswear company to $0.39 a share from $0.48 for its first quarter and to $0.46 from $0.48 for the second quarter. The Street is looking for $0.44 and $0.53, respectively, according to UBS.

"Our channel checks suggest Nike's global sales growth trend has deteriorated over the last three months," UBS analysts Jay Sole and Mauricio Serna said in a note to clients. "Sentiment is bearish, yet our conversations with investors suggest the market underestimates the magnitude of the downward EPS revisions this print is likely to cause."

The company's US direct-to-consumer sales likely dropped by a mid-single-digit percentage year over year in the first quarter, while performance in Europe and China remains pressured, according to the note.

UBS reduced its price target on the Nike stock to $42 from $48, with a neutral rating, citing expectations for performance in line with peers over the next 12 months.

The company's shares up 0.3% in Thursday afternoon trade and have fallen about 44% so far this year. Nike is scheduled to report results Oct. 1.

"We think Nike's (first-quarter) report will cause Street EPS estimates to drop and market sentiment to weaken," Sole and Serna said. The company's stock will likely fall if its full-year guidance implies EPS below $1.55, according to the note. UBS is projecting $1.30

The brokerage reduced its annual sales guidance for Nike through 2029 mainly due to weaker projected top-line growth across the company's global business.

"We now anticipate much weaker sales trends in Greater China related to Nike's strategy to streamline its (e-commerce) wholesale distribution in the region starting in 2027," the analysts said. "Additionally, we now anticipate higher promotional pressures, as well as higher freight and product input cost pressures to Nike's (gross margin percentage) associated with energy price inflation."

Although the company's ongoing business reset will take time to play out, it has the brand strength and balance sheet to ultimately return to mid-single-digit percentage sales growth rates and a 10% earnings before interest and taxes margin over the long term, according to the note.

Earlier this month, athletic apparel retailer Lululemon Athletica (LULU) cut its fiscal 2026 guidance amid challenging market dynamics and continued pressure on the brand. Sportswear maker Under Armour (UAA, UA) lowered its full-year revenue outlook last month amid weak demand in North America and Asia Pacific.

Price: $35.83, Change: $+0.05, Percent Change: +0.14%

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