Nike shares slid between 3% and 6% in extended trading on Thursday after the athletic apparel giant reported mixed fiscal first-quarter financial results and unveiled an aggressive operational restructuring plan that will eliminate jobs starting in 2027.
The company’s fiscal first-quarter revenue slipped 4% year-over-year to $11.21 billion, missing Wall Street expectations that stood between $11.32 billion and $11.33 billion. Net income fell 2% to $712 million, while diluted earnings per share came in at $0.48—down from $0.49 a year earlier, yet slightly topping the consensus estimate of $0.43. Gross margin provided a bright spot, expanding 60 basis points to 42.8%, edging out forecasts of 42.4%.
A major drag on overall revenue came from Greater China, where sales plummeted 26%, alongside weakness in the lifestyle category. The sportswear division, which represents nearly half of quarterly sales, dropped by a low-double-digit percentage. In contrast, North American revenue remained steady at $5.13 billion, marginally ahead of the projected $5.11 billion.
Chief Executive Elliott Hill addressed analysts, explaining that while technical performance products gained traction, the segment is not yet large enough to offset soft demand across Nike Sportswear, Jordan Brand, and Greater China. Hill highlighted that consumers are facing increased macroeconomic pressures, such as sticky inflation and geopolitical friction, noting that Nike must bring renewed energy and creative design back to its core lifestyle lines.
To regain market competitiveness, Nike revealed a sweeping turnaround strategy dubbed “Pace.” The initiative focuses on modernizing the global supply chain, building a new operating campus in India, and streamlining management into three unified regions: the Americas; Asia Pacific and Greater China; and Europe, the Middle East and Africa.
The Pace program is projected to generate roughly $2.5 billion in cumulative cost savings through fiscal 2031, though it will incur a 15-cent per share restructuring charge in fiscal 2027. As part of this overhaul, Nike confirmed it will cut roles across the organization beginning in calendar year 2027, marking its third layoff announcement this year. In an internal memo, Hill acknowledged the impact on employees, emphasizing that the reorganization aims to speed up decision-making, respond faster to consumer demand, and direct capital toward core athletic innovation.
Looking ahead, Nike forecast full-year fiscal 2027 revenues to decline by a high-single-digit percentage, with adjusted earnings per share projected between $1.15 and $1.35. The update lands during a challenging year for the footwear powerhouse, whose stock has tumbled over 40% year-to-date and recently lost its spot on the prestigious S&P 100 index after nearly 20 years.
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