Nike missed analysts’ projections in its first quarter in fiscal year 2027 on Thursday as the company reported a 4 percent drop on weaker demand in China and pressure from increased competition.
The company also revealed a revamped restructuring plan that will extend through 2031, which also includes an unspecified amount of layoffs as part of a $2.5 billion in cost savings measure.
News of the report sent the company’s shares closest to their lowest level in 13 years in after-hours trading at a $35.15 close.
“The Sport Offense is driving measurable progress across our performance business, and we introduced Pace to help us accelerate and scale that momentum across Nike,” Elliott Hill, Nike president and CEO 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.”
Nike posted $11.2 billion in revenue in the quarter compared with Wall Street analysts’ average estimate of $11.32 billion for a 4 percent drop, and said it expects revenues to drop in the high single digits in fiscal 2027. The sportswear giant also reported profits of $712 million, a 2 percent slide, from the same point a year ago.
In China, the company saw a massive 26 percent decline in the region on a constant-currency basis in the quarter — its ninth straight quarterly decline, added to investor anxiety over the brand’s continued turnaround effort.
Nike launched its “Win Now” revamp plan under Hill, which began in December 2024 and included job cuts, reducing redundant executive roles, a deeper focus on performance products and reestablishing ties with key retail partners. The initiative was set to end by the end of 2026, but the company is now transitioning to a longer roadmap that will extend well through the next five years.
“We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management,” Dave Denton, executive vice president and chief financial officer for Nike said in the report. “As we move forward, we remain focused on strengthening the health of our product portfolio, improving productivity across the enterprise and allocating resources with discipline to support long-term shareholder value.”
China typically accounts for around 15 percent of the company’s yearly revenue and is Nike’s third-largest market after North America and Europe, the Middle East and Africa. In July, Nike said it would cut ties with more than 1,000 online distributors in the region in a move set for January to streamline how its product is marketed, priced and presented in China.
Nike said it will shift its online presence to its own website, app and Tmall, JD.com and Douyin after a fragmented distributor network led to inconsistent pricing, diluted branding and stalled regional sales.
Meanwhile, in late September, the company was removed from the S&P 100 in its quarterly rebalancing. The downgrade, after 18 years, shifted Nike from being among the most stable and influential blue-chip companies in the United States, but the brand still remains in the broader S&P 500.
