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Nike stock fell in extended trading Thursday after the athletic apparel giant reported weaker-than-expected revenue, warned of a sharp sales decline for fiscal 2027 and announced a restructuring plan expected to result in layoffs beginning next year.
The company’s fiscal first-quarter results were mixed. Nike exceeded Wall Street expectations for adjusted earnings, but revenue missed estimates as ongoing weakness in China continued to weigh on the business. Shares dropped roughly 3% after the announcement.
Nike Stock Slides After Revenue Miss
Nike reported earnings per share of 48 cents, compared with the 43 cents analysts expected, according to LSEG estimates. Revenue reached $11.21 billion, below the $11.32 billion forecast.
Net income declined 2% to $712 million from $727 million during the same period a year earlier. Overall revenue fell 4%, reflecting pressure across important international markets and continued challenges in consumer spending.
- Earnings per share: 48 cents versus 43 cents expected
- Revenue: $11.21 billion versus $11.32 billion expected
- Net income: $712 million, down 2% year over year
- Gross margin: 42.8% versus 42.4% expected
North America was a relative bright spot. Revenue in the region reached $5.13 billion, slightly above the $5.11 billion estimate. Nike also delivered a stronger-than-expected gross margin, suggesting that cost controls and pricing helped offset some of the pressure on sales.
China Weakness Remains a Critical Challenge
The biggest concern for investors was China, where revenue dropped 26%. Nike has faced sustained weakness in the market as competition intensifies and consumers remain cautious.
The decline adds to the company’s broader turnaround challenge. China has historically been an important growth market for Nike, but changing consumer preferences, local brands and uneven economic conditions have made it more difficult for the company to regain momentum.
Nike said its brand revenue was significantly affected by the continued decline in China. The result highlights why investors are closely watching the company’s product pipeline, distribution strategy and ability to connect with consumers in key international markets.
Powerful Restructuring Plan Will Bring Layoffs
Nike also unveiled a restructuring strategy called Pace, designed to position the company for long-term growth. The plan includes supply chain modernization, changes to the company’s workforce and a new geographic structure.
The business will be organized around three major regions: the Americas; Asia Pacific and Greater China; and Europe, the Middle East and Africa. Nike also plans to build a new campus in India as part of its effort to reshape operations and support future growth.
However, the changes will come with job losses. Nike said the restructuring will lead to fewer roles across the company, with layoffs expected to begin in 2027. The retailer did not disclose how many employees could be affected.
CEO Elliott Hill acknowledged the uncertainty in a letter to employees, saying he understood that news about job reductions would be difficult. The cuts represent the third round of layoffs Nike has announced this year.
Nike expects the restructuring to generate approximately $2.5 billion in savings through fiscal 2031. The company also expects a restructuring charge of 15 cents per share in fiscal 2027 earnings.
Weak Forecast Adds Pressure to Nike Turnaround
For the full fiscal year, Nike expects revenue to decline by a high-single-digit percentage. The company forecast adjusted earnings per share between $1.15 and $1.35.
The outlook suggests that Nike’s recovery will take longer than many investors had hoped. The company has already been working through excess inventory, weaker demand and intense competition from brands including Adidas, On and other fast-growing athletic labels.
Nike stock has fallen more than 40% this year, reflecting growing concerns about the pace of the turnaround. Higher inflation, geopolitical tensions and slower consumer spending have also made shoppers more selective.
Investors will now focus on whether Pace can improve efficiency without damaging product innovation or brand strength. The company’s ability to stabilize China, rebuild demand in North America and increase sales through digital and direct channels will likely be central to its recovery.
What Investors Should Watch Next
The upcoming quarters may provide a clearer picture of whether Nike’s restructuring is producing meaningful progress. Key indicators include regional revenue, inventory levels, gross margin performance and demand for new footwear and apparel releases.
Although the earnings beat offered some relief, the revenue miss and weak fiscal 2027 outlook overshadowed that positive result. For shareholders, the latest report reinforces that Nike’s transformation remains a long-term project rather than a quick rebound.
Why did Nike stock fall?
Nike stock fell after the company reported revenue of $11.21 billion, below the $11.32 billion expected by analysts. The company also issued a weak fiscal 2027 outlook and announced upcoming layoffs.
How much did Nike revenue decline in China?
Nike revenue in China dropped 26% during the quarter, making the region one of the company’s most significant challenges.
When will Nike layoffs begin?
Nike said layoffs connected to its restructuring plan are expected to begin in 2027. The company has not provided a specific number of affected jobs.
What is Nike’s Pace strategy?
Pace is Nike’s restructuring and turnaround strategy. It focuses on supply chain modernization, regional organization, workforce changes and long-term cost savings.
How much does Nike expect to save?
Nike expects the restructuring to deliver approximately $2.5 billion in savings through fiscal 2031.
