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Shares slide after Nike earnings report

Nike shares fell about 3% in after-hours trading on Thursday after the company released its fiscal first-quarter results and announced a new restructuring plan. The sportswear giant said it expects revenue to decline by a high-single-digit percentage across fiscal 2027.

The company also said adjusted earnings per share are projected to come in between $1.15 and $1.35 in fiscal 2027. The outlook reinforced market caution over the company’s pace of growth.

What did the first-quarter numbers show?

Nike reported net income of $712 million for the period. That was down 2% from $727 million a year earlier.

Revenue fell 4% year on year to $11.21 billion. The company said much of the pressure on its core brand revenue came from ongoing weakness in its China operations.

Regional performance and pressure across business lines

Revenue in China fell 26%. Management said it would take faster steps to support a recovery in the region, while warning that the impact would not disappear quickly.

North America revenue came in at $5.13 billion, slightly above market expectations. Gross margin also beat forecasts at 42.8%, but that improvement was not enough to offset weakness elsewhere.

According to company executives, the sportswear segment, which accounts for nearly half of quarterly revenue, posted a low-double-digit decline. Nike said demand for lifestyle products remained soft and that consumers were spending more cautiously because of inflation and geopolitical uncertainty.

Restructuring plan and market reaction

Management led by Elliott Hill has launched a restructuring program called “Pace” as part of its long-term growth strategy. Layoffs are expected to begin in 2027, although the company did not say how many positions will be affected.

The plan includes the following priorities:

  • Modernizing the supply chain
  • Reorganizing operations into three geographic structures
  • Building a new campus in India
  • Changing the work model and workforce structure

Nike said the program is aimed at generating about $2.5 billion in savings by fiscal 2031. The company also said the restructuring will have a 15-cent drag on earnings per share in fiscal 2027.

The stock has already lost more than 40% this year. The new outlook and layoff signal added to investor concerns that the recovery could take longer than expected.

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