Nike Shares Sink as China Sales Tumble 26% and Sportswear Giant Forecasts Steep Full-Year Decline

Nike shares fell sharply in after-hours trading on Thursday after the sportswear giant reported another quarterly revenue decline, issued a far gloomier forecast for its full year and unveiled plans for more job cuts.

The company, reporting fiscal first-quarter results for the period ended Aug. 31, said revenue fell 4 percent from a year earlier to $11.21 billion, missing the $11.32 billion analysts had expected, according to Reuters. Diluted earnings of 48 cents a share beat the roughly 43-cent consensus estimate cited by CNBC, while net income slipped 2 percent to $712 million. Gross margin improved 60 basis points to 42.8 percent, helped by lower warehousing and logistics costs.

The deepest pain remains in Greater China, where sales fell 26 percent on a constant-currency basis — the ninth consecutive quarterly decline in a market accounting for about 15 percent of Nike’s annual revenue, according to Reuters. Rising competition from local Chinese sportswear brands, shifting consumer tastes and heavy promotional activity across retail channels have all weighed on the business. In North America, revenue grew 2 percent to $5.13 billion.

Chief executive Elliott Hill told analysts on the earnings call that “our Nike performance business is not yet large enough to offset the pressure we’re seeing in Nike sportswear, Jordan brand, and Greater China,” according to CNBC. Hill said reviving those weak areas “will take time,” and confirmed the company will deliberately cut the volume of Jordan retro launches, admitting Nike had “supplied too many retro products.”

Nike now expects fiscal 2027 revenue to decline by a high single-digit percentage — far worse than the roughly 2 percent drop analysts had pencilled in — and forecast adjusted earnings of $1.15 to $1.35 a share, well below the $1.67 analysts expected, according to Reuters.

The company also announced a sweeping restructuring it calls “Pace,” targeting $2.5 billion in cumulative savings through fiscal 2031. The plan includes further job cuts — employees will be notified from 2027, though the number of roles was not disclosed — a reorganisation of global operations into three geographic regions, supply-chain modernisation and a new campus in India. Shares dropped about 8.5 percent in extended trading.

Sources:

• Reuters: Nike plans more job cuts, forecasts steep revenue drop
• Wealth Professional / CNBC: Nike revenue slips 4% as restructuring sets up 2027 job cuts
• Seoul Economic Daily: Nike to cut jobs as China sales plunge