Nike Shares Drop After Weak Revenue Outlook and Layoff Announcements
Nike's shares fell sharply in premarket trading after the company reported declining revenue for its fiscal first quarter, with sales dropping to $11.2 billion—a 4% decrease year-over-year. The decline was attributed primarily to weaker performance in Greater China, despite growth in North America. Nike also announced a new cost-cutting initiative called 'Pace,' which aims to save $2.5 billion by 2031 and includes plans for further layoffs starting in 2027. The company has already implemented two rounds of job cuts this year—775 roles at U.S. distribution centers in January, followed by another 1,400 positions primarily in its tech division in April. Citi analysts described Nike as increasingly becoming a 'cost-cutting story,' noting that the firm's sales guidance fell below expectations and suggesting it may not justify premium valuations compared to growing peers. Nike expects high-single-digit revenue declines for fiscal 2027, with CEO Elliott Hill emphasizing long-term restructuring efforts. The stock was down nearly 10% in premarket trading on Friday and has lost almost half its value since the beginning of the year.
Tickers: $NKE
Topics: cost-cutting initiatives layoffs revenue decline stock price drop