Nike Shares Stumble Following Weak Earnings and Restructuring Announcement

Nike stock faced significant downward pressure in premarket trading on Friday, extending a two-day slide after the athletic apparel leader reported a 4% decline in fiscal first-quarter revenue to $11.2 billion. Net income also slipped to $712 million, down from $727 million in the same period last year. While North American sales showed some resilience, the company struggled with performance in Greater China, prompting CEO Elliott Hill to emphasize the need for long-term strategic adjustments. Investors reacted sharply to the company's bleak outlook, which forecasts a high-single-digit revenue decline for 2027. Shares were down over 10% in premarket activity, contributing to a year-to-date decline of nearly 45%. To combat these challenges, Nike unveiled 'Pace,' a new operating model aimed at generating $2.5 billion in cost savings by 2031. This initiative involves supply chain modernization and organizational streamlining, which the company confirmed will lead to further staff reductions beginning in 2027. These planned cuts follow previous workforce reductions earlier this year, including layoffs in U.S. distribution and tech divisions. Analysts at Citi maintained a 'neutral' rating, noting that Nike is shifting its narrative toward cost-containment as it grapples with ongoing pressure in its core Jordan and Sportswear categories.