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Three restructurings in three years, and Nike still isn’t done fixing itself. Analysts say the sportswear giant’s return to sustained growth could still be years away.
Nike posted fiscal 2027 first-quarter results on Thursday, reporting revenue of $11.2 billion, down 4% from the same time period last year and below Wall Street’s average estimate of $11.32 billion.
The company also announced a restructuring of its business, dubbed Pace, which will include cutting back on Jordan Brand retro launches and reducing overall supply to create more scarcity.
The Pace plan also includes reorganizing Nike’s business into three geographies: the Americas, which encompasses North America and Latin America; Asia-Pacific and Greater China; and Europe, the Middle East, and Africa. This means it will no longer report results specifically from China, where Nike is undergoing a strategy shift that some analysts view as a misstep.
Nike CEO Elliott Hill noted that the reorganization will mean redundancies, and the company foreshadowed a workforce reduction.
“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty,” Hill said in a statement. “I don’t take that lightly.” He noted the company will be transparent, and that “decisions about impacted roles” will begin next year.
Nike already underwent layoffs earlier this year, cutting 775 jobs in January, primarily at distribution centers in Tennessee and Mississippi. Before that, in 2024, Nike cut 2% of its workforce. As of May 31, Nike employed roughly 73,000 people globally, according to a U.S. Securities and Exchange Commission filing.
Laurent Vasilescu of BNP Paribas said in a research note that this marks Nike’s third restructuring program in three years “to try and jump start its business that has flatlined.”
“Two years ago, we heard from new management that the Win Now strategy would be done by the end of 2025, then it was pushed out to the end of 2026,” Vasilescu wrote. “Tonight we didn’t hear anything about the Win Now strategy or at least an acknowledgement of a new timeline or goal post. This would suggest that the rightsizing of the business may last for several years to come.”
Others are also convinced Nike’s ongoing turnaround could take years to show signs of significant progress.
“Overall, the Nike turnaround is progressing slowly and is taking a step back in FY27,” wrote analysts at Telsey Advisory Group. They noted that consumers “seem tired of some lifestyle footwear styles and Nike faces structural challenges to its business model in China.”
“Correcting these issues will take time and an inflection back to sales growth is now not likely until calendar 2028, at the earliest,” they wrote.
The Telsey analysts did note that Nike’s focus on sports has yielded “strong results” in its performance business, which includes running, basketball, football, and tennis. But the performance unit represents just 35% of the company’s overall sales, something the analysts said is “not enough to offset the declines in other areas.”
Morgan Stanley analysts said Nike’s turnaround strategy and timeline “remains in flux.” They hope to receive more clarity on the plan during the company’s upcoming investor day next month, and highlighted that Nike said revenues are expected to decline by high-single-digits for the full fiscal year.
Shares of Nike are down almost 47% year to date and more than 77% over the last five years.
And they haven’t bottomed yet, UBS analysts said. “Why it’s still not time to buy Nike,” their note was titled.
Jefferies analysts were a little more optimistic. They wrote that “the turnaround is progressing,” and that management’s “deliberate actions” “suggest greater focus on rebuilding long-term brand and marketplace health.” Still, they noted the company’s operations in China and its Jordan and sportswear businesses “remain works in progress.”
