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Nike reports lower revenue and unveils restructuring plan

Nike reported mixed financial results for the first quarter of its fiscal year and announced a new restructuring plan as part of its long-term growth strategy. The company said the plan will include layoffs starting in 2027, but did not disclose how many positions will be affected.

The company’s net profit came in at $712 million, 2% below the $727 million recorded in the same period last year. Revenue fell 4% to $11.21 billion. Nike said the decline was driven in particular by weakness in its China business, where revenue dropped by 26%.

North America revenue reached $5.13 billion, slightly above expectations of $5.11 billion. Gross margin also beat market forecasts, coming in at 42.8% versus an expected 42.4%.

2027 outlook and share reaction

The company said it expects revenue for fiscal 2027 to fall by a high single-digit percentage. It projected adjusted earnings per share in the range of $1.15 to $1.35.

Nike also said restructuring costs will weigh on fiscal 2027 earnings per share by $0.15. Following the announcement, the company’s shares fell about 3% in after-hours trading. The stock is down more than 40% so far this year.

What is in the company’s savings plan?

Nike said the strategy aims to generate about $2.5 billion in savings by fiscal 2031. The layoffs announced under the plan mark the company’s third round of staff reductions this year.

Key points of the plan

  • Modernizing the supply chain and streamlining operations.
  • Reorganizing the business into three geographic units: the Americas; Asia Pacific and Greater China; and Europe, the Middle East and Africa.
  • Building a new campus in India and making changes to the workforce structure.

The company said the transformation plan is being rolled out gradually across different business lines based on priorities. Nike also stressed that slower consumer spending, driven by geopolitical tensions and high inflation, is weighing on demand.

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