Nike Q1: Decks are cleared, now what?

Nike Q1 revenue was $11.2b, down 5% cc, slightly missing consensus. By region, North America grew 2%, EMEA declined 5%, Greater China fell 26%, and APLA was flat cc. Footwear fell 6% cc while apparel grew 2%. Gross margin expanded 60 bps YoY to 42.8%, beating consensus, with operating margin of 7.9% also above expectations and EPS of $0.48. Nike reinstated its FY guide, expecting revenue to decline HSD% and adjusted EPS of $1.15–$1.35 (including ~$0.15 of PACE-related restructuring charges). Management announced the PACE operating-model transformation program targeting ~$2.5b in cumulative savings through FY31, with a 5-yr algo to be shared at the November investor day. Bernstein cut FY27 EPS to $1.34 and its price target to $45 (from $68), maintaining Outperform but seeing little material upside until the mid-term algo is clarified.