Nike debt outlook cut to negative by Moody’s

Moody’s Ratings has changed its debt ratings outlook for Nike, Inc. from stable to negative, citing a turnaround process that is taking longer than previously anticipated. The agency expects Nike’s revenue and earnings to decline through fiscal year 2027 and into fiscal 2028, driven by persistent challenges in the sportswear sector and the Greater China market.

While Moody’s affirmed Nike’s A2 senior unsecured notes rating, the negative outlook reflects concerns over projected cash flow deficits and a sustained period of underperformance. The agency noted that while Nike possesses a valuable brand and strong liquidity—including approximately $8.5 billion in cash and short-term investments—the company faces significant headwinds. Recent financial data shows revenue fell about 4% last quarter, with a 26% decline in Greater China and a 28% drop for Converse in constant currency.

Analysts suggest the shift in outlook signals that Nike’s primary issue is weakening consumer demand rather than tariff pressures. Unlike previous concerns regarding trade policy, the current pressure stems from the costs associated with Nike’s restructuring and a slump in consumer spending. The company's upcoming investor day on November 16–17 is expected to be a key event for investors monitoring the brand's recovery.