Nike (NKE): Combing through the 10-Q: Savings come later

BofA reiterates Underperform on Nike (NKE.US) with a PO of $24.00 (price $34.74). The 10-Q confirms most of Pace's $2.5bn of savings will come in F29 and F30; Nike expects ~$1.0bn of pre-tax charges through F31, including ~$0.3bn in F27, in addition to $0.3bn recognized in F26. 1Q inventory ended at $7.8bn, down 3% y/y, with Greater China down 22% to $853mn, though Greater China sales fell 26% cc (wholesale -31%, DTC -18%) on lower store traffic, elevated promotions, and high marketplace inventory. 1Q27 gross margin expanded 60bp y/y to 42.8%, led by 90bp from lower warehousing and logistics costs. Nike removed total company and regional comparable store sales from the 10-Q, and store and digital sales weakened across regions. With China and EMEA under pressure, weak wholesale sell-through, and innovation yet to offset weakness in larger lifestyle categories, visibility on a durable sales and earnings recovery remains limited;