In after-hours trading on Thursday, October 1, Nike shares dropped nearly 10% after the sportswear giant projected a further drop in yearly sales and announced additional layoffs. Alongside its fiscal first-quarter results, the company unveiled the Pace restructuring program, aiming for USD 2.5 billion in cumulative savings through fiscal 2031.
Nike Stock Falls After Weaker Sales Forecast
During the regular session, Nike shares closed down 0.71% at USD 35.15 before tumbling to roughly USD 31.77 during extended trading.
The sell-off came on the heels of the October 1 earnings report, which projected that annual revenue would decrease by a high-single-digit percentage.
For fiscal 2027, the firm anticipates adjusted earnings per share between USD 1.15 and USD 1.35. This guidance excludes about USD 0.15 per share related to Pace restructuring expenses. Furthermore, Nike forecasts its annual tax rate will hit the mid-20% bracket.
Revenue for the quarter dipped 4% to USD 11.21 billion, missing the USD 11.32 billion consensus estimate from analysts. When adjusting for currency fluctuations, sales dropped 5%. On a constant-currency basis, Greater China revenue suffered a 26% decline, deepening ongoing challenges in a key market.
Net income decreased 2% to approximately USD 712 million, resulting in diluted earnings per share of USD 0.48. On the positive side, reduced warehousing and logistics expenses lifted the gross margin by 0.6 percentage points to 42.8%. Meanwhile, Nike Direct revenue fell 8%, driven by a 13% contraction in digital sales.
Pace Restructuring Will Reduce Nike Jobs
Chief Executive Elliott Hill addressed the upcoming workforce reductions in a message to employees. “This work will result in fewer roles across Nike,” he stated, noting that decisions regarding impacted positions will start in calendar year 2027 and extend beyond.
Exact headcounts and specific geographical locations have not yet been finalized. Hill assured that leaders will communicate directly with impacted employees, and the organization will fulfill all necessary local consultation requirements prior to sealing proposals.
An SEC filing reveals that Nike anticipates roughly USD 1 billion in pretax restructuring charges through fiscal 2031, with the majority allocated toward severance and additional employee costs. These figures build upon approximately USD 300 million in severance expenses recorded throughout fiscal 2026.
Out of the new charges, about USD 300 million is expected to be booked in fiscal 2027. The company’s savings goal leaves out restructuring expenses and future reinvestments, and Nike cautioned that actual expenses and savings might vary as the rollout unfolds.
Nike Plans Regional Changes
The Pace initiative expands upon a cost-cutting strategy originally unveiled in March 2026. It features global supply chain adjustments, a brand-new campus in Bengaluru, India, and a reorganization into three distinct geographic divisions alongside other cost-saving measures.
These three units will consist of the Americas, Asia Pacific and Greater China, and Europe, the Middle East and Africa. Teams are slated to transition to this framework in fiscal 2028, with leadership for the Asia Pacific and Greater China region based out of Singapore.
The Bengaluru facility is set to back Nike, Jordan Brand, and Converse. Current staff members in India will transition to the site in stages, accompanied by multi-year expansion plans.
Additional insights regarding Nike’s financial objectives and growth strategy will be shared during its Investor Day scheduled for November 16–17.
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