Nike Q1 Earnings Preview: Can the Swoosh Find Its Stride?
Over the last couple of years, the stock price of Nike has continued to drop, from its peak of around $177 in 2021 to a current level of $69. Nike’s upcoming Q1 2026 earnings report is shaping up to be one of its most important updates in recent history. Weighed down by lower levels of consumer demand, challenges with inventory, and a much larger economic issue for the company, this earnings report needs to be perfect.
Currently, Wall Street consensus is predicting earnings of $0.28 per share, a sharp 60% decrease from Nike’s $0.70 earnings per share in the same quarter last year. Another trusted stock site, TipRanks, suggests an Eps of roughly $0.27. Now, I don't want you to believe that Nike has completely fallen apart; they still have revenues projected around $11 billion, down around 5% from last year, but still a good amount of money.
Now, one of the main reasons I came across, about why Nike has been going through this challenge, is the fact that they have not had as many sales in China as they have in the past. Expected to drop 20ish percent Year to Year, and we can’t forget about the tariffs to come with imports, these small things make large impacts on Nike and companies all around the US.
Even with all these things going on, in all honesty, I believe Nike can beat the Wall Street Consensus of $0.28 per share and go closer to $0.35 EPS. This does still show a weakness and drop over the years, but here are a few reasons I believe it can be beaten.
Inventory discipline. Nike has been trying to reduce excess product, which in turn will protect margins.
Cost Control: If they are able to find ways to cut costs, that can show up in this quarter's results, increasing the ESP
There are many more reasons, but these are the two biggest ones. And I don't want to get too ahead of myself, but I feel there would even be a chance the ESP can potentially come closer to $0.40 EPS, if these two main reasons are hit
Some things we should also watch out is…
How is nike going to counter the tariffs? Adding on, can lower freight costs outweigh markdowns and tariffs?
Can Nike have a comeback in their sales in China? Being one of its most critical markets, maybe even its most critical market, even while projecting a double-digit decline?
If management can put on good, strong predictions for the first quarter next year and in 2027, could that help drive stock performance?
These were just three questions I was wondering about while researching Nike and coming to this conclusion. With a projected recovery going on within the next two years, I can see Nike’s stock value also rising back up to roughly $80, if not higher, within the next couple of months. This quarter is really important for the health of Nike’s stock, and if they really have the momentum to have a comeback, or not enough, and stay stuck. Hoping for an EPS around $0.35 with a hopeful upside of more, these results will be crucial in shaping the market’s view of Nike's comeback potential.