Nike Revenue Down As Company Signals Workforce Reduction

Nike’s revenue for the fiscal 2027 first quarter was $11.2 billion, down 4% from the year-ago quarter and below the average Wall Street estimate of $11.32 billion. The athletic-wear company also foreshadowed a workforce reduction. 

Shares fell almost 4% following the company’s earnings release Thursday afternoon, reaching their lowest point in over a decade. But the company expressed confidence in its continued turnaround, including a planned reorganization and expansion in India.

The sneaker giant has been taking heat for poor performance, including its recent removal from the S&P 100 and a change in its strategy in China, which some analysts believe is a misstep. Nike stock is down almost 45% year to date and more than 76% over the last five years. Its sales in China are down 22% year over year. Division revenues for North America were up 2% year over year.

For the full fiscal year, Nike said revenues are expected to decline by high single digits. Wholesale revenues were $6.8 billion, down 1% from the prior quarter, a dip Nike attributed “primarily to declines in Greater China, partially offset by growth in North America.” Converse, a subsidiary of Nike, continued to perform poorly, with revenues of $263 million, down 28%.

“We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management,” EVP and CFO Dave Denton said in a press release. “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.”

The company remains in the midst of a turnaround under president and CEO Elliott Hill, who assumed those roles in 2024. 

Analysts at Jefferies said in a research note that they view the growth in North America as “validation” of Hill’s strategy. But the “weaker-than-expected” full-year guidance “reflects an uneven recovery, with Greater China the biggest overhang.”

“While the turnaround will take time, improving profitability and [North America] momentum support our view that progress is on track.”

Nike also announced Thursday it is initiating “changes to its operating model” aimed at allowing it to “move faster, serve athletes and consumers more locally, and invest more aggressively in innovation.” Under that plan, Nike is organizing the 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.

Hill noted that the reorganization will mean redundancies. 

“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty,” Hill said in a letter issued in conjunction with the earnings report. “I don’t take that lightly. Throughout this process, we will communicate directly, act with transparency and treat people with respect. Decisions about impacted roles related to this work will begin in calendar year 2027 and beyond.”

The company touted plans to establish a new campus in India that will help it operate more efficiently in the region.