Nike shares tumble after revenue miss as 'Pace' overhaul brings layoffs

Nike shares tumbled on Friday after the sportswear giant missed first-quarter revenue expectations, warned full-year sales would fall much more steeply than feared, and unveiled a sweeping restructuring that will cut jobs.

Revenue for the quarter to August was $11.21 billion, down 4% from a year earlier and below the roughly $11.3 billion analysts had expected. Diluted earnings per share of $0.48 beat the $0.44 consensus, while gross margin improved 60 basis points to 42.8%.

Greater China was the weak spot, with revenue down 26%, while North America rose 2%. Converse revenue fell 28% to $263 million and Nike Direct declined 8%.

Nike now expects fiscal 2027 revenue to decline by a high single digit, against analyst expectations of roughly a 2% fall, and forecast adjusted earnings of $1.15 to $1.35 a share, well below the $1.65 consensus.

Chief executive Elliott Hill unveiled “Pace”, an operating-model overhaul targeting about $2.5 billion in cumulative savings through fiscal 2031, with supply-chain modernisation, consolidation from four geographic divisions to three, and fewer roles — decisions on impacted jobs begin in calendar 2027.

“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty. I don’t take that lightly,” Hill wrote in a note to employees, according to the New York Post.

Shares fell 6.7% on Friday after dropping 8.5% in extended trading on Thursday, putting the stock down more than 48% this year.