Nike released financial results for its fiscal first quarter that fell short of expectations across multiple metrics. The company’s net income declined 2% to $712 million compared to the prior year, while total revenue contracted 4% to $11.21 billion. The Nike brand itself experienced significant headwinds, particularly in its Greater China business, which saw revenues plummet 26% year-over-year.
CEO Elliott Hill acknowledged the challenging operating environment, noting that the company’s performance business segment had not grown sufficiently to offset weakness in other areas. Nike’s sportswear segment, representing just under half of quarterly revenue, experienced a low-double digit percentage decline. Hill attributed part of the softness to a lack of consumer energy in the lifestyle category and described shopper behavior as cautious, though he emphasized that Nike’s market leadership position obligated the company to drive greater creativity in its product offerings.
Looking ahead, Nike provided a cautious outlook for the full fiscal year, projecting revenues would decline by a high-single digit percentage while adjusted earnings per share would range from $1.15 to $1.35. The company simultaneously announced a comprehensive restructuring initiative called Pace, which is expected to generate approximately $2.5 billion in cost savings through fiscal 2031. The plan encompasses supply chain modernization, reorganization into three geographic regions (the Americas; Asia Pacific and Greater China; and Europe, the Middle East and Africa), construction of a new campus in India, and workforce changes. Layoffs will begin in 2027 as part of the restructuring, though the company did not specify the number of positions that would be eliminated. The restructuring is anticipated to carry a 15-cent impact on fiscal 2027 earnings per share.
Nike stock fell approximately 3% in extended trading following the announcement. The restructuring represents the third round of layoffs the company has announced this year, reflecting ongoing challenges in the consumer discretionary sector amid macroeconomic pressures. Year to date, Nike shares have declined more than 40%.
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