Nike Plunges On Slashed Outlook As UBS Warns Against Catching A Falling Knife

Nike shares are down nearly 10% in pre-market trading in New York after the struggling athletic footwear and apparel company warned its sales slump will deepen and unveiled a restructuring that will eliminate jobs.

As of Thursday's close, year-to-date performance had been absolutely abysmal, with shares down 45%. The extended decline could now put the stock on track for its worst annual loss on record.

The decline follows the sportswear giant's earnings release after hours on Thursday, when it stated that it now expects revenue to decline by a high-single-digit percentage this fiscal year, substantially worse than the 2.4% drop analysts tracked by Bloomberg forecast.

Nike spent years catering to woke culture while neglecting to stay ahead of the industry as competitors ate into its market share. It now plans to fold its Greater China unit into its broader Asia Pacific division and combine Latin America with North America.

This restructuring is expected to deliver $2.5 billion in savings over five years while generating roughly $1 billion in pretax charges.

CEO Elliott Hill wrote in a memo to investors that this restructuring "will require fewer roles over time."

Hill, approaching his third year as CEO, has focused on rebuilding retail relationships and organizing Nike around individual sports.

The ugly guidance on Thursday comes after BofA retail analyst Lorraine Hutchinson downgraded the stock last week and warned that its "turnaround is taking longer" than expected.

UBS retail analyst Jay Sole wrote in a note shortly after earnings about "why it's still not time to buy Nike" and maintained a "Neutral" rating on the stock, lowering his 12-month price target to $34 from $42.

Sole explained:

The key downside risk is Nike's downward EPS revision cycle may persist:

The pivotal Nike question remains "Is all the 'bad news' now priced in?" Despite the pullback in Nike's stock price, we still don't see a good entry point. Nike's stock price is still not cheap at ~28x our FY27 EPS estimate, in our view, and this suggests a solid rebound remains priced in. We continue to see a balanced upside/downside skew. The main upside risk is Nike's November Analyst Day convinces the market the stock's downward earnings revision cycle has ended and investors are willing to put a peak multiple on their FY27 EPS outlook. The main downside risk is the rebound takes much longer than the market anticipates and therefore the downward earnings revision cycle may not be over.

We see 3 reasons NKE's downward EPS revision cycle may not be over:

1. The market may be underestimating the negative impact on unit demand as Nike tries to reduce discounts. Nike's FY27e gross margin likely hits a 20-year low. To drive a gross margin recovery, Nike would have to significantly reduce discounts. We believe the elasticity of demand in this situation could be greater than 1. However, we don't think Nike's -HSD% FY27 revenue guidance incorporates this. We believe the sales guide reflects weak demand, elevated inventory levels and a major China pullback. Thus, we see risk pulling back on promotions drive another big drop in sales in FY28.
2. The market may be underestimating the negative impact on sales from Nike having to reset its Sportswear and Jordan businesses. Nike brand Sportswear plus Jordan Streetwear equates to roughly 60% percent of NKE revenues. 1Q27 sales in these categories fell at least -LDD% y/y. We believe fashion trend shifts and a lack of brand momentum are hurting Nike in a major way. The risk is Nike can't impact these trends soon and this leads to more pressure well into FY28.
3. The market may be underestimating the negative impact on margins if sales slow. Nike announced its 3rd big cost adjustment program since 2020. The concern is Nike may not have very many easy cost reductions left to make and will need to ramp up investment in order to grow. If so, more downside revenue surprises could pressure margins more than we and the market expect.

We lower our FY27-FY29 EPS estimates ~4-6%, respectively:

We lower our FY27 and FY28 revenue growth forecasts related to Nike's reset of its Jordan and Greater China businesses. We note Nike mgmt. expects these actions to weigh on revenues over FY27 and into FY28. Additionally, we now anticipate greater fixed cost deleverage driven by our weak topline forecasts. Lastly, we now model a higher share count given lower than expected buybacks during Q1 and expected going forward given our reduced FCF forecasts. This is partially offset by a reduced SG&A forecast given Nike's newly announced Pace cost savings initiative. These factors are the main drivers of the 4-6% reduction in our FY27-FY29 EPS estimates, respectively. Please find much more forecast detail inside.

Valuation: We lower our PT 19% to $34 and remain Neutral:

Our $34 PT is based on 18x our $1.90 FY29 EPS estimate. Our prior was based on 21x our old $2.00 FY29 EPSe. We lower EPS estimates and the P/E used to value NKE given our view fundamental trends in China and Nike's Jordan business are weaker than previously thought. Our multiples analysis indicates a $34 PT puts NKE's valuation in-line with peers in terms of P/E, P/Sales, & FCF yield (Fig. 6). Our DCF analysis also supports a $34 valuation (Fig. 9).

Other Wall Street analysts offered their first take assessments, courtesy of Bloomberg:

Morgan Stanley (underweight, PT $27 from $31)

• Nike's 1Q print "did little to change" our underweight rating, "with negative EPS revision & valuation de-rating risk remaining intact," analyst Alex Straton says
• "The Investor Day is the next key catalyst, with our focus on the magnitude of further topline right-sizing"

Guggenheim (buy, PT to $50 from $60)

• "With yet another downward revision, the questions remain when guidance cuts will represent the band-aid rip versus slow bleed as they continue to debate the path potential stabilization ahead," analyst Simeon Siegel says

Vital Knowledge

• Analyst Adam Crisafulli says Nike's first-quarter numbers were fine, but the guidance "is pretty ugly"
• Expectations "were very low" after earlier results from peers Dick's Sporting Goods and JD Sports, but the inability of management to get a handle on the business "is going to grate on investors (and might even start spurring talk about potentially changing the CEO position, even though Hill has only been in the role for ~2 years)."

CFRA (buy, PT $62)

• "We are disappointed with the results and expected better full-year EPS guidance," writes analyst Zachary Warring
• Says growth in North America was more than offset by continued deterioration in Greater China and a sharp ongoing decline at Converse

According to Bloomberg data, 15 analysts are "Buy" rated on the stock, another 25 with "Holds," and 7 "Sells." The average 12-month price target is $40. 

UBS Sole makes a great point: the stock is still not at the bottom.  

Tyler Durden Fri, 10/02/2026 - 06:55

My end-of-week morning reads:

• Has AI impacted the labor market yet? Evaluating the state of the evidence: Alex Imas and Jacob Schaal review the impact of AI on the labor market with a focus on early-career workers. The more important lagging indicators, unemployment and layoffs, have hardly shown any effect of AI in the labor market so far: the impact of AI on the overall labor market has been consistently muted. At the same time, there is some evidence of impact on entry-level hiring. (Ghosts of Electricity)

​• Why I Outsource My Biggest Decisions to a Chatbot, and None of the Small Ones: Lauren Leek’s chatbot told her to quit her jobs, travel Australia and leave London. She did all three, and explains why she lets AI weigh in on big choices but not small ones. It chose my job, my two months in Australia and my city, but I never let it pick my lunch. It took me six experiments and a few thousand simulated versions of my life to figure out why. (Lauren’s Data Substack) but see I Tried to Outsource My Chores to a Robot. It Was a Total Fiasco. Meta’s Muse app is supposed to do all of your internet tasks. Big Tech is already resisting. (Slate)

​• Muni Managers Tout Equity-Like Returns After Historic Selloff: Aashna Shah: after the beating in municipal bonds, managers say yields are now high enough to rival what stocks typically deliver. (Bloomberg)

• A tale of Elves and Orcs Elf-land tends to get richer with time. But most of the recent productivity gains have been intangible, hard to monetise, top of the Maslow Hierarchy style things. Their working time has become more leisurely, as they spend more of it clicking “go ahead” to a computer, idly sending one another memes, watching videos of golden retrievers. You only need to sneeze in Elf-land and you get half a day off. They take their productivity in going home earlier, bidding up the price of fancy artwork, increasing the size of cinema seats, paying their footballers ever higher amounts, eating more cake AND diet pills. In Orc-land the productivity goes towards adding ever more barbs onto their arrows, and building horrible catapults that they load up with rocks and dead cows. And imprisoning one another. (Giles Wilkes)

​• Disney World Solved a Problem That Could Save America Billions Every Year: Every time a contractor digs, they risk hitting the tangle of cables, pipes and gas lines under American streets. Sara Herschander on the Magic Kingdom’s utility tunnels as the fix. (Vox)

• What Does Growing NIMBY-ism Mean for Data Center Investing? Consultants say the trend is strong, but they are ‘advocating for caution and a diversified approach.’ (Chief Investment Officer) but see A.I. Is Going Rogue. Who Should Be Held Responsible?: After a string of escalating attacks since July involving models from the major labs, an unlikely coalition wants AI companies held legally liable when their systems go off the rails for their runaway technology. But legal scholars say applying existing law could be messy. . David McCabe reports.  (New York Times)

​• She’s Spent Two Decades Talking to Parents Who Don’t Vaccinate Their Children. Here’s What She’s Learned: Nicholas Florko on what twenty years of conversations with vaccine-skeptical parents reveal about trust in science. A sociologist on why some families skip immunizations, and why ‘misinformation’ isn’t really to blame (Stat)

• The New Forever War Why America and Iran Fight On Without Victory.  (Foreign Affairs)

• Gravity Seems Holographic. What Does That Mean for Reality? The biggest breakthrough in modern theoretical physics is the discovery that gravity can collapse the dimensions of space. Physicists don’t yet understand the implications. (Quanta Magazine)

• The New York Yankees’ Old-School Plan to Conquer October: In an age of short stints on the mound, the franchise hopes that trusting its starters to go long can lead them to a first championship since 2009. (Wall Street Journal)

Video of the day: Ben Affleck on AI and Hollywood Economics

Be sure to check out our Masters in Business interview this weekend with Omar Aguilar, President, Chief Executive Officer, and Chief Investment Officer of Schwab Asset Management, which runs more than $1 trillion across over 100 ETFs, mutual funds, and separately managed account strategies. He has held both the CEO and CIO titles since 2022

 

Your Geopolitical Risk Radar | Oct–Dec 2026

Source: Deutsche Bank Research

Sign up for our reads-only mailing list here.

 

The post 10 Friday AM Reads appeared first on The Big Picture.

London Mosque Pushes Wife-Beating, Throwing Gays Off Tall Buildings

Authored by Steve Watson via Modernity.news,

A London mosque with charitable status is under investigation for posting sermons that tell husbands to hit disobedient wives and setting out execution methods for gay men, including being thrown from tall buildings.

The lectures were not smuggled out of a private meeting. They sit on the Hackney Islamic Community Centre's own YouTube channel, delivered from the mosque also known as Masjid Daar Al-Hadeeth. The National Secular Society referred the material to the regulator. The Daily Mail published the tapes. Britain's official response is a case file.

The Charity Commission has opened a regulatory compliance case. It has not, so far, taken the charity's status away.

WATCH: Islamic preacher at London mosque encourages worshippers to hit their wives if they refuse to obey themhttps://t.co/YgOqAvbRtU pic.twitter.com/J103nBPrmO

— Video Forensics (@Video_Forensics) October 1, 2026

Yasin Munye, described as an ustaadh at the centre, reads in one lecture from Manthumatu al-Kaba'ir, a poem listing what the tradition treats as major sins. One of them, in his words, is "disobeying the husband, leaving the house without his permission, and disobeying the husband when it comes to calling her to bed, when it comes to calling her for intimacy, when she says 'no' without any excuse."

The remedy he sets out is not a row and a solicitor. "Advise her, and boycott her in bed, don't touch her in bed - and discipline them physically as well, by lightly hitting them to show them who is in charge."

If she still refuses, he says husbands "don't have to give her a house anymore." He adds: "If a person has multiple wives, then he doesn't have to stay with her; he can abandon her and stay with the other wife until she becomes obedient again."

The same lecture turns to sex between men. Munye calls it "one of the most evil acts" and "a crime" that sees both participants "executed in the Sharia." On the method, he is specific. "Scholars, they differ on how the execution occurs. Some of them say he is executed through the sword, like every other normal execution. Others say that they are thrown off of a tall building and rocks are thrown after that on top of them."

Author and Head of Public Policy at Christian Concern, Tim Dieppe, reacts after a preacher at a London mosque reportedly encouraged Muslims to beat their wives to 'discipline' them.

?? Become a Friend of GB News: https://t.co/c2dfqbeDpJ pic.twitter.com/xF25ZZPvZd

— GB News (@GBNEWS) October 1, 2026

The National Secular Society says the videos were published on the charity's YouTube account in 2023. They were still there when campaigners and reporters went looking this week, but have since been made private.

A separate lecture praises a state that still kills people accused of witchcraft. "Sihr (magic) is real, it is true," Munye says. "In Saudi Arabia, they are killed, alhamdulillah (praise be to God), bless that, because a lot of Muslim countries today you don't find this ruling applied. Alhamdulillah, in that country, that punishment is still applied."

A community elder at the same mosque, Abu Sa'ad Muhammad Al-Iraqi, treats the British police as the problem. If a husband "is not nice to you and mistreats you," he says, "there is a way: you bring your family, speak to his family, to teach him a lesson. But you have to give his right, otherwise don't be his wife."

He goes on: "Women think these days, our sisters think, that you only be kind to him if he's been kind back... it doesn't work like that." Then the line that should have ended the tax exemption on the spot. "In another country they can't do that, they won't. But it is an unfortunate reality of this country that they turn wife against husband. They know if you slap them once, they'll call the police for you. They don't fear Allah."

The centre has been a registered charity since 2006. It re-registered as a charitable incorporated organisation in April, a change that separates trustees from the charity's debts and lets it hold property under charity law. Its objects include advancing the Islamic faith. In the year to March 2025 it took in £191,097, almost £155,000 of it in donations, and paid no tax on any of it.

Megan Manson, head of campaigns at the National Secular Society, called the renewal alarming. The charity, she said, has hosted "lectures which promote violence against women, say women cannot refuse their husbands sex, and condone the death penalty for gay men and those accused of 'witchcraft'."

"Hackney Islamic Community Centre is just one of many charities promoting misogyny, homophobia and other harmful ideologies through the charitable purpose of 'the advancement of religion'," she said. "This charitable purpose must be urgently reviewed. It is evidently facilitating the advancement of ideas which, far from benefiting the public, could fuel discrimination, division and abuse."

The Charity Commission provided a stock reply, noting that the commission "has clear expectations that all charities, regardless of their purpose, must operate for the public benefit and provide a safe and trusted environment for all."

It added that concerns had been raised "about alleged sermons and social media content linked to Hackney Islamic Community Centre and we have opened a regulatory compliance case to further assess these. This will determine any next steps."

A compliance case is not a statutory inquiry. Earlier this year a preacher at Hatch End Islamic Centre, Ahmed Shah, told worshippers it was mandatory for women to do the housework and serve their husbands. The sermon came down. The commission offered advice and guidance, but the centre's charity status remained in place.

None of this arrives in a vacuum. In July the Home Office was still handing Skilled Worker sponsorship licences to Islamic bookshops stocking jihad texts and a guide that includes wife-beating. Reform MP Lee Anderson called it "a perfect illustration of 14 years of Tory failure: rather than doctors and engineers, we brought in staff for Islamic shops selling books on jihad."

In August, West Midlands Police invited non-Muslim staff to fast for a day in Ramadan as solidarity. Shadow justice secretary Nick Timothy said the police "should be a national force for all of us, observing the same standards regardless of creed," and that encouraging non-Muslim staff to observe Ramadan was "wholly inappropriate."

The same month a retired officer, Stephen Gray, 65, was convicted under the Communications Act for resharing a bacon meme about Islam. He was fined more than £1,000. "I made a joke, an ironic joke, about Islam. That is all it was at the end of the day. A joke," he said. Lord Young of the Free Speech Union called it "a new low. No one making a similar joke about Jesus would face prosecution."

Last month, Barnet Hill Academy in West Hendon moved onto the state payroll as a voluntary-aided Islamic primary, with a compulsory white hijab for girls from Year 3. Stephen Evans of the National Secular Society said it was "appalling that taxpayers are being asked to fund a school that forces girls as young as seven to wear the hijab."

A recent YouGov survey for King's College London found 34 per cent of British adults believe London already has no-go areas where Sharia dominates and non-Muslims cannot enter.

On the one hand, a former police officer can be fined for a joke about Islam. On the other, a Islamic preacher can tell men to strike their wives, abandon them for a second wife, and advocate for gay men being thrown from buildings, yet retain charity status.

Is there a clearer example of a two-tier state? Mock the creed and the courts come for you. Preach beating and killing, and nothing happens.

Tyler Durden Fri, 10/02/2026 - 06:30

UK Officials Are Keeping A List Of Brits Who Question Government Policy

Authored by Steve Watson via Modernity.news,

The British state is compiling a list of people who criticise its own counter-terror programme. Ordinary X and Reddit users who questioned Prevent training, flagged a one-sided focus on the "far Right," or simply criticised it have had their posts logged, stored and "investigated" by a Home Office-linked unit most of them have never heard of.

Officials spent more than a year trying to keep that database secret. They only released it after an appeal to the Information Commissioner's Office. The public was never told their feeds were being trawled.

The Standards and Compliance Unit, or StaCU, was set up in February 2024 as an "opaque" body to handle complaints about Prevent, the safeguarding scheme sold as a way to stop people becoming terrorists. Documents obtained by The Metro and released by Rights & Security International show StaCU did more than wait for formal complaints.

"Social media posts criticising government policy are being listed, monitored and investigated by officials."

The government are supposed to serve the public rather than monitor those who disagree with them by Orwellian surveillance and snooping. https://t.co/mH62tNEkYV

— James Melville ? (@JamesMelville) September 30, 2026

Between March 2024 and February 2025 it made 77 "observations" of critical online comments, most of them from X, with others from Reddit and even articles in the Guardian and the Telegraph.

Jacob Smith, Freedom of Expression and Belief Team Leader at Rights & Security International, fought for a year to force the Home Office to publish the material.

"It is shocking that the government has been trawling X and Reddit to find out who has been critiquing Prevent - and then storing that information," he said. "You should be allowed to criticise government policy without being put on a list."

He added: "People should be able to express their views on social media without that being catalogued in government databases."

Many of those logged, he said, had posted without thinking "that the government might be looking at their feed and taking that data. It is in an almost private setting."

His conclusion was blunt: "It's a stark reminder that, in the government's eyes, anything you share online is fair game and could go into a file forever."

A large share of the logged posts accused Prevent training of treating the "far Right" as the main threat while skating over Islamist extremism.

One X user was recorded after calling the training "complete bullshit." They wrote: "Anyone's who done the prevent training knows it only talks about the far Right. Islam extremism isn't even mentioned."

Another poster said they "sat through Prevent training at work ... and the narrative was very much that the far Right is the biggest threat." They added: "I kid you not!"

StaCU says it tries to independently verify claims about Prevent. It managed that for only 10 percent of the posts. The unit's parent body, the Commission for Countering Extremism, sometimes replies in public, inviting the user to submit a formal complaint.

In one case, after a post accused Prevent training of "turning a blind eye to Islam," the Commission wrote: "Hello, we process and investigate complaints about Prevent and are interested in finding out more about the training referenced above. Please feel free to DM us, tweet us back, or make a formal complaint using this link."

What that reply does not say is that the user's post has already been stored in an internal government list.

It was not only anonymous accounts. Open Rights Group had a tweet recorded that said: "How data is managed and stored under the Prevent programme lacks transparency."

Sarah Lasoye, the group's Programme Manager for Pre-Crime, told The Metro: "Prevent has expanded far beyond its stated aim of identifying people considered 'vulnerable to radicalisation', and has increasingly been used to justify extensive surveillance."

She added, "It is deeply concerning to see the Prevent duty being used to enable the monitoring of people and organisations simply because they are critical of the programme. That raises serious questions about freedom of expression and the right to dissent and protest."

"There is also a troubling lack of transparency about what happens to the information gathered through this social media monitoring: how long it is retained, who it is shared with, and ultimately what the Government is using it for," Lasoye urged.

Rights & Security International says organisations including Hope Not Hate and Maslaha also appear in or around the observations. The Campaign Against Antisemitism had a post logged that did not even name Prevent. It criticised police for failing to take a Hezbollah vigil seriously. A spokesperson said: "We aren't sure whether to be flattered or concerned that StaCU has picked up a post of ours."

The group added, "If it's because we've dared to be critical of law enforcement's lax attitude toward Islamist extremism in this country, we stand by what we said and would reiterate it for as long as it takes to bring about change. But if our post was flagged because StaCU agrees with us that police forces have failed to train their officers on what Islamist terrorism looks like and which organisations are banned, we hope that the message is being received and change is coming."

That last point tracks a long-running complaint. Sir William Shawcross, in his 2023 review of Prevent, wrote: "The bar for what RICU includes on Islamism looks to be relatively high, whereas the bar for what is included on the extreme Right-wing is comparably low."

Home Office figures for the year to September 2025 showed 10,293 Prevent referrals. Twenty percent were recorded as extreme right-wing ideology. Eight percent concerned Islamist extremism.

A Home Office spokesperson said: "Prevent does not track people who may have criticised the programme, and nor does it target any particular community." The department added that keeping the public safe is "our number one priority" and that Prevent has "moved more than 6,000 people away from violent ideologies since 2015."

The documents say otherwise on the first claim. StaCU collated the posts as "open-source complaints," stored them internally, and the Home Office refused to release the list until the Information Commissioner forced its hand. Nobody outside the unit can say who else sees the file, how long it is kept, or whether it is shared with police, platforms or other departments.

This is not an isolated compliance desk. It sits inside a growing stack of state machinery built to police speech, "narratives" and online anger.

In June, we laid out how the Home Office's Research, Information and Communications Unit has been used to manage the mass-migration story - briefing police to cast concerned citizens as "unsympathetic thugs," shaping family statements after migrant-linked killings, and running a higher bar for Islamism than for the so-called extreme Right.

 

The same week, ministers moved to give Ofcom faster powers to block "false information" during so-called crisis events - a phrase wide enough to cover any unrest the government would rather you not describe accurately.

London Mayor Sadiq Khan had already demanded a central government social-media "disinformation" unit, complaining of an "outrage economy" while knife crime, robbery and theft climbed on his watch. "If platforms fail to act, the state must have the tools to make them," he said.

Last week Prime Minister Andy Burnham used his first United Nations speech to announce a National Centre for Information Defence - a new machine to "detect, attribute and disrupt" what ministers call hostile information attacks and to stop a "distorted and untrue narrative about Britain."

He wrapped it in Russia, bots and "community cohesion." Nigel Farage called it a Ministry of Truth. "Never ever trust this authoritarian Government," he said. Defence Secretary Wes Streeting insisted: "We're not interested in policing domestic political dissent." Labour's record is why that promise is already worn thin.

Police have their own version. The National Internet Intelligence Investigations team, stood up after the 2024 Southport riots, has referred more than 100 "suspicious" posts to local forces, including dozens tied to protest-related activity.

Officials describe it as "a dedicated function at a national level for exploiting internet intelligence." Reform UK leader Nigel Farage called it "the beginning of the state controlling free speech."

The arrest figures sit underneath all of it. Between 2021 and 2025 at least 62,199 people were arrested in Britain on suspicion of communications offences - section 127 of the Communications Act 2003, the Malicious Communications Act 1988, and the Online Safety Act's false-communications offence.

That is roughly 34 arrests a day. Big Brother Watch director Silkie Carlo said speech policing is "out of control" and called the result an "Orwellian mess." Lord Toby Young asked why authorities spend so much time "policing our tweets when they could be policing our streets."

Prevent is sold as safeguarding. The logged posts are not bomb plots. They are workers calling official training biased, campaigners asking how data is stored, and a Jewish group complaining that police treat a banned terrorist organisation too lightly.

If that is enough to enter a Home Office database, the category of "acceptable" speech is already whatever officials decide it is on a whim.

Britain does not need another unit to hunt "untrue narratives." It needs a government that can survive being questioned without opening a file on the questioner.

Tyler Durden Fri, 10/02/2026 - 03:30