Nike shares plummeted 8.5 percent in extended trading Thursday after the company forecast a high-single-digit revenue decline for fiscal 2027 and announced $2.5 billion in cost cuts, including job eliminations.
The stock hit its lowest level since September 2013, having fallen 40 percent this year under CEO Elliott Hill. The after-hours move erased approximately $230 billion in market capitalization.
Nike reported fiscal Q1 revenue of $11.2 billion, down 4 percent year-over-year and below analyst expectations. Net income fell 2 percent to $712 million.
The bigger shock: management now projects a high-single-digit revenue decline in fiscal 2027—roughly 250 basis points worse than the 2.4 percent decline Wall Street had modeled. If realized, it would be Nike's lowest annual sales since May 2020.
The restructuring consolidates geographical divisions and merges Greater China—which has suffered nine consecutive quarters of declining sales—into the broader Asia Pacific region. Latin America will fold into North America. The company expects $1 billion in pretax charges over five years but has not disclosed how many jobs will be eliminated or where.
China is the core problem. Rising domestic competition and a consumer shift toward local brands have forced Nike to cut promotions and withdraw from third-party e-commerce platforms. The weakness is broad: Sportswear (roughly half of revenue) declined in the low double digits last quarter; the Jordan brand underperformed; and Converse has now posted 14 consecutive quarters of falling sales.
Hill, who took the helm in 2024, sent a memo to staff saying "This work will result in fewer roles across Nike," with decisions on affected positions to begin in 2027. The restructuring signals management sees no quick fix to the China slowdown or broader consumer demand issues.
