Nike shares plummeted 10.36 percent in premarket trading Friday, extending a second consecutive day of declines after reporting falling revenue and announcing further staff reductions. The stock has dropped nearly 45 percent since the start of the year.
Fiscal first-quarter revenues fell 4 percent to $11.2 billion. Net income declined 2 percent to $712 million from $727 million in the prior year.
Greater China accounted for most of the damage, though North America growth partially offset losses. Nike Sportswear and Jordan Brand segments both faced significant pressure.
Nike President and CEO Elliott Hill said, "We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we're taking deliberate actions to strengthen those businesses the right way for the long term." He attributed part of the weakness to a "lack of energy in the lifestyle space right now," which is hurting store traffic.
The company projects high-single-digit revenue declines for fiscal 2027.
Nike is rolling out a restructuring program called Pace aimed at delivering $2.5 billion in cost savings by 2031, with job cuts starting in 2027. Hill said, "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."
These cuts follow two earlier rounds this year: 775 jobs across U.S. distribution centers in January and 1,400 positions, mostly in tech, in April.
Pace also includes reorganizing Nike's operations into three geographic units and opening a new campus in India.
Citi analysts kept a neutral rating on Nike shares. They cited below-consensus sales guidance as a primary concern.
"Nike is turning into a cost-cutting story, announcing a $2.5 billion cost savings program as management is adapting to the reality of significant pressure within Sportswear, Jordan, and China," Citi analysts said in a note Friday.
Citi flagged that the full impact of Pace won't be visible until 2029. While Nike could exceed some guidance targets, the analysts said there is no justification for the company to command a premium multiple relative to its faster-growing peers.
