U.S. sportswear giant Nike announced a new turnaround plan on the 1st that includes additional job cuts and a reorganization of its global operations, and said it expects revenue to decline by a high-single-digit percentage in fiscal 2027. The move is aimed at accelerating the business recovery being pursued under CEO Elliott Hill. First-quarter China revenue fell 26% year on year on a currency-neutral basis; China is Nike's third-largest market, accounting for about 15% of annual revenue, but sales there have now declined for nine consecutive quarters. The company will reorganize its operating structure from four global regions to three: the Americas, Asia Pacific and Greater China, and Europe, Middle East and Africa, and plans to open a new hub in India with functions such as talent acquisition. The number and types of jobs affected by the reorganization have not yet been decided, and employee notifications will begin in 2027. The measures expand on a restructuring that already includes previously announced job cuts, and Nike expects about $2.5 billion in cost savings by fiscal 2031. First-quarter revenue came in at $11.2 billion, below the analyst average estimate of $11.32 billion, while the gross margin rose 0.6 percentage points from a year earlier to 42.8%.
Nike IncNike unveiled a turnaround plan with additional job cuts and guided to a high-single-digit full-year revenue decline, with Q1 revenue of $11.2B missing estimates.
