The warning was sounded as it reported a 2% fall in Q1 earnings on the back of lower sales and gross profit.
The retailer booked net income of $712m for the three months ending 31 August.
Revenue declined 4% to $11.2bn. Gross profit fell 3% to $4.8bn.
Specifically, Nike Brand revenues fell 4% on a reported and currency-neutral basis, primarily due to declines in Greater China and EMEA, partially offset by growth in North America.
Nike Brand wholesale revenues fell 1% on declines in Greater China, partially offset by growth in North America.
Nike Direct revenues fell 8% on a reported basis and down 9% on a currency-neutral basis, due to a 13% decrease in Nike Brand Digital and a 5% decrease in Nike-owned stores.
Revenues for Converse were $263m, down 28% on a reported and currency-neutral basis, due to declines across all territories.
Nike CEO, Elliott Hill, remained upbeat, saying the “Sport Offense” strategy is “driving measurable progress”.
Nike also announced the launch of Pace, an operating model transformation to accelerate and scale the success of the Sport Offense which includes efforts to modernise Nike's global supply chain, the establishment of a new campus in India to fuel its enterprise capabilities, a realignment to three geographies, and further streamlining of the organisation to reduce costs.
“We have more work to do in Nike Sportswear, Jordan Brand and Greater China, and we're taking deliberate actions to strengthen those businesses the right way for the long-term,” said Hill.
CFO Dave Denton added: “We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management. As we move forward, we remain focused on strengthening the health of our product portfolio, improving productivity across the enterprise and allocating resources with discipline to support long-term shareholder value."
Going forward, Nike said revenues are both expected to decline high-single digits in fiscal 2027.
Effective tax rate for fiscal 2027 is expected to be in the mid-20% range, subject to changes in earnings mix and discrete tax items.
Adjusted diluted earnings per share is expected to be in the range of $1.15 to $1.35, which excludes approximately $0.15 of restructuring expenses related to Pace for fiscal 2027.
The news follows shortlt after Nike lost its spot in the S&P 100, the top 100 US listed companies, for the first time in nearly 20 years. The sportswear giant hit an all-time high of $200bn in market cap in 2021 but has struggled in recent years.
