Nike reported mixed first-quarter results for its fiscal year and announced a restructuring plan that will lead to layoffs starting in 2027. The company expects fiscal 2027 revenue to decline at a high single-digit percentage rate and expects adjusted earnings per share in the range of $1.15 to $1.35. Nike shares fell about 3% in after-hours trading on Thursday after revenue dropped 4% to $11.21 billion, below the $11.32 billion analysts had expected. Earnings per share came in at 48 cents, above the 43 cents forecast, while net income was $712 million, down 2% from $727 million a year earlier. Revenue in China fell 26%, while North American revenue was $5.13 billion, slightly above the $5.11 billion estimate, and gross margin was 42.8% versus an estimate of 42.4%. Nike CEO Elliott Hill told analysts the company is moving urgently to improve its business in China and acknowledged that the Nike Performance business is not yet large enough to offset pressure in Nike Sportswear, Jordan Brand and Greater China. Sportswear, which accounted for nearly half of revenue this quarter, declined at a low double-digit rate. The restructuring plan, called Pace, will focus on improving the supply chain, reorganizing into three regions covering the Americas, Asia Pacific and Greater China, and Europe, the Middle East and Africa, building a new campus in India, and changing working models and staffing. It is expected to generate about $2.5 billion in savings by fiscal 2031 and will result in restructuring charges of 15 cents per share against fiscal 2027 earnings per share. The staff reduction is the third round of layoffs Nike has announced this year, while Nike shares have fallen more than 40% this year.
Nike IncNike reported a 4% revenue miss, guided fiscal 2027 revenue to decline high single digits, and announced restructuring/layoffs with $2.5B savings plan and charges.
