4Q26 Revenue: $18.7B, +6.3% YoY, beat estimates by $660M
4Q26 GAAP EPS: $3.29, beat estimates by $0.11
1Q27 Guidance: revenue is expected at US$18.95 – 19.60B, implying 2 – 6% local-currency growth. The revenue-growth outlook was better than feared and materially helped counter the market’s AI-disruption thesis, although the FY27 EPS midpoint of approximately US$14.60 is broadly around current consensus.
FY27 Guidance: FY27 local-currency revenue growth is expected at 3 – 6%, with operating margin of 15.9 – 16.1% and EPS of US$14.39 – 14.81. Free cash flow is guided to US$11.0 – 11.8B.
Dividend/Share Buyback: Returned a record US$11.5B to shareholders during FY26, comprising US$7.5B of share repurchases and approximately US$4.0B of dividends. Accenture raised its quarterly dividend 5% to US$1.71/share and has approximately US$6.9B of remaining repurchase authorization, including US$6.0B newly approved in September. Management expects at least US$9.5B of capital returns in FY27.
Comment: This was a materially better quarter than the market had been pricing in. Revenue exceeded the top end of guidance, bookings increased to US$22.2B, and both Consulting and Managed Services grew 7% in local currency. More importantly, there is little evidence yet that AI is causing an outright collapse in Accenture’s business model. Instead, clients are increasingly hiring Accenture to implement AI, redesign workflows and integrate data infrastructure. Bookings involving eight emerging AI and data partners more than tripled in FY26, while revenue associated with those partners more than doubled. Accenture also ended FY26 with nearly 110,000 AI and data professionals, substantially above its original three-year target. The key issue is whether AI ultimately expands Accenture’s addressable market faster than it compresses traditional billable-hour economics. Management acknowledged ongoing pricing pressure as clients increasingly demand productivity benefits from AI, while FY27 adjusted EPS growth of only 3 – 6% remains modest. Acquisition intensity is also increasing, with Accenture expecting approximately US$8B of FY27 acquisitions, including roughly US$3B of cybersecurity transactions shifted from FY26. This should support growth but increases integration risk and makes underlying organic growth somewhat harder to assess. Shares surged approximately 16% to US$212.30 following the results, marking a major expectations reset after substantial YTD underperformance. At the current price, ACN trades at approximately 14.5x the midpoint of FY27 EPS guidance, which is still inexpensive relative to its historical valuation, but the one-day rerating has removed much of the immediate asymmetric upside. 1Q27 recommended trading range: $195 to $245. Neutral Outlook.
1Q27 Revenue: $11.21B, -4.2% YoY, miss estimates by $110M
1Q27 GAAP EPS: $0.48, beat estimates by $0.04
FY27 Guidance: FY27 revenue is now expected to decline high-single digits, materially worse than market expectations for roughly a 2% decline. Adjusted EPS is guided to only US$1.15 – 1.35, well below approximately US$1.67 – 1.68 consensus. Nike also launched its new Pace restructuring programme, targeting approximately US$2.5B of cumulative savings through FY31, against roughly US$1.0B of associated pre-tax charges.
Dividend/Share Buyback: Returned approximately US$610M to shareholders through dividends during the quarter, +3% YoY. The quarterly dividend remains US$0.41/share. Share repurchases remain paused as management prioritizes the turnaround and balance-sheet flexibility.
Comment: This was a weak quarter despite the EPS beat. There are pockets of genuine improvement: gross margin expanded, North America returned to modest growth, wholesale trends have stabilized and management says its performance-oriented “Sport Offense” categories are gaining momentum. Inventory also declined 3%, reducing the risk of another major promotional clearing cycle. These are early signs that Elliott Hill’s efforts to repair marketplace health are working in selected areas. The problem is that the deterioration in Nike’s weaker franchises is substantially larger than those improvements. Greater China revenue fell 26% in constant currency, marking a ninth consecutive quarterly decline, NIKE Digital fell 13%, Converse declined 28%, and management explicitly identified NIKE Sportswear and Jordan Brand as areas requiring further restructuring. Most importantly, FY27 EPS guidance of US$1.15 – 1.35 represents a major downward reset versus approximately US$1.68 consensus, indicating that the turnaround will take materially longer and require more reinvestment than the market previously expected. Shares closed at approximately US$35.15 before falling roughly 7 – 8% after hours to around US$32.2 – 32.6, near levels last seen more than a decade ago. At roughly US$32.5, the stock trades around 26x the midpoint of FY27 adjusted EPS guidance, which is not obviously cheap given declining revenue and earnings. 2Q27 recommended trading range: $29 to $38. Negative Outlook.