October 2, 2026
Nike’s FY27 Earnings Won’t Cover Its Own Dividend
Guidance came in 25% below consensus. At $32, you’re not buying cheap. You’re buying time.
Hey there, bargain hunter. Nike reported last night, and the word you are looking for is not cheap. It is complicated.
Record-High Copper Ignites District-Scale Discovery Below $2
Copper has blasted to all-time highs as AI data centers, electrification, and grid expansion drive demand for the strategic metal. One small-cap Canadian copper company trading below $2 is unlocking a historic Yukon copper belt that was never explored as a unified system. High-grade copper is already confirmed at the flagship, multiple opportunities are advancing across the belt, and drilling is accelerating with multiple rigs turning.
See what the drills are targeting next – before the next copper-gold results hit.
Scoreboard
Q1 FY27 revenue: $11.21 billion, down 4% and about $110 million short of the $11.32 billion Wall Street expected. EPS came in at $0.48, beating the $0.43 consensus by a nickel. Gross margin improved 60 basis points to 42.8%, aided by lower warehousing and logistics costs and a tailwind from foreign exchange. The quarter itself was not a disaster. The guidance was.
Nike now expects FY27 revenue to fall in the high-single digits. Analysts had previously penciled in roughly a 2% decline. Adjusted EPS guidance landed at $1.15 to $1.35, excluding another $0.15 of Pace restructuring charges. The pre-report consensus was $1.67. That is a 25% cut at the midpoint. Shares fell roughly 8% to 9% after hours to trade near $32.
The Real Reason
Greater China fell 26% currency-neutral to $1.18 billion. Nike is deliberately burning down parts of its digital distribution there, pulling back from channels it considers off-brand and consolidating around flagship storefronts on Tmall, JD, and Douyin. Running grew double digits in China for the sixth straight quarter, so this is not a product problem. It is a marketplace reset that management says will take multiple seasons to clear.
Executive Order 14028 Changed How Banks Work
Over 100 U.S. banks are quietly rewriting the rules under Executive Order 14028 – giving Washington new power to track, and potentially freeze, your accounts. It’s sold as cybersecurity. Critics call it control.
Meanwhile, Jordan Brand revenue fell at a mid-teens rate and Sportswear dropped low double digits after Nike cut Dunk volumes nearly 50%, costing roughly $200 million in revenue. Performance sport, which covers running, football, tennis, and golf, grew high single digits globally. Exclude China, and performance would have risen low double digits. Two very different businesses live inside the same ticker.
The Business and the Money
Nike makes roughly 65% of revenue from footwear, the rest from apparel and equipment. FY26 full-year revenue was $46.4 billion. The company returned $610 million to shareholders via dividends in Q1 alone, and held about $8.4 billion in cash and short-term investments at the end of FY26. Leverage is approximately 2x on a debt-to-EBITDA basis. The balance sheet is solid.
The Pace restructuring is the new variable. Nike expects to book around $1 billion in pre-tax charges, primarily severance, through FY31, on top of $0.3 billion already recognized in FY26. Savings are projected at $2.5 billion cumulative through FY31, with the bulk landing in FY29 and FY30. CEO Elliott Hill confirmed in a memo to employees that role decisions begin in calendar 2027 and beyond. No headcount number has been disclosed. This is the third wave of layoffs Nike has announced this year, as reported by the financial press.
5 Nasdaq Stocks Under $5 That Aren’t What You Think
Most stocks under $5 come with a reputation. These don’t.
Each company on this list is tied to major trends like AI, cybersecurity, and next-gen infrastructure.
They may not have the spotlight yet, but they are building real businesses in real markets. That combination is not always easy to find at this price level.
Is It Cheap?
At $32 after hours, NKE trades at roughly 25x the midpoint of FY27 adjusted EPS guidance. That is not screaming-bargain territory. On trailing earnings of $2.10 from FY26, the multiple at $35.15 (the October 1 regular-session close) is about 16.7x, near a 10-year low. The annual dividend is $1.64 per share. Midpoint FY27 EPS guidance is $1.25. That means earnings do not cover the dividend in FY27 without drawing on cash, leaning on the balance sheet, or shrinking buybacks further.
Bull, Base, Bear
- Bull ($44+): China stabilizes faster than guided, Pace savings are front-loaded, performance sport sustains double-digit growth, and the multiple re-rates toward 30x once earnings recover.
- Base ($34-38): Restructuring proceeds on schedule, FY28 revenue returns to low single-digit growth, EPS climbs toward $2.00 by FY29, and the stock grinds higher with the dividend intact.
- Bear ($25-28): China deteriorates further, Jordan and Sportswear do not recover, Pace charges exceed estimates, and margins face additional pressure from tariffs or promotional pricing.
Action Plan
Do not buy the whole position today. If you want exposure, start with 25-30% of your intended stake near current levels, sized to let you add if this revisits the $27-29 range. The brand is real. The road back is not short.
Cheap Investor Checklist
- Greater China revenue: watch for stabilization above -15% before adding aggressively
- Jordan Brand trajectory: mid-teens declines need to moderate by Q3 FY27
- Pace charge recognition: about $0.15 per share expected in FY27, with the program running through FY31
- Gross margin: 42.8% in Q1; target is expansion toward 44%+ as mix improves
- Dividend coverage: EPS must clear $1.64 before the payout is sustainable from earnings
- North America trend: +2% in Q1 is the one bright spot; watch it hold
- Inventory: verify the quarter-end inventory trend in the 10-Q; it needs to keep improving
- Performance sport revenue share: rising is the bull thesis in progress
Bottom Line
If Nike’s China reset completes in FY28 and Pace savings arrive on schedule, $32 will look like a gift. If China keeps sliding and restructuring charges surprise to the upside, $32 is not the floor. The brand is not broken. The timeline for fixing it just stretched to FY31, and that is a long time to hold a stock whose FY27 earnings cannot cover its own dividend.
