Nike Shares Decline More Than 10% After Reporting Lower Revenue and Cost-Cutting Plans

A pedestrian looks at a smartphone while walking past a Nike store on May 31, 2026, in Shenzhen, Guangdong Province, China. Cheng Xin | Getty Images

Nike shares fell in premarket trading on Friday, marking a second consecutive day of declines after the company reported lower revenue and outlined plans to reduce staff beginning in 2027. The sportswear company stated on Thursday that fiscal first-quarter revenue decreased 4% to $11.2 billion, with reductions in Greater China partially offset by growth in North America. Net income totaled $712 million, down 2% from $727 million in the prior-year period.

"We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we're taking deliberate actions to strengthen those businesses the right way for the long term," Nike President and CEO Elliott Hill said in the earnings release. The company projected that revenue would decline in the high-single digits for fiscal 2027. Shares were last reported down 10.36% in premarket trading and have fallen nearly 45% since the start of the year.

The company also introduced a new operating model called "Pace," which it expects to generate $2.5 billion in cost savings by 2031. The initiative includes plans to reduce the number of roles starting in 2027. "This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty. I don't take that lightly," Hill said in a separate statement. "Decisions about impacted roles related to this work will begin in calendar year 2027 and beyond."

Under the program, Nike intends to update its global supply chain, reorganize operations into three geographic regions, open a new campus in India, and further consolidate functions to lower expenses. Nike has already reduced its workforce twice in 2026, eliminating 775 positions at U.S. distribution centers in January and 1,400 positions, primarily in its technology division, in April.

Citi analysts wrote in a note on Friday that they would maintain a neutral rating on the stock, noting that the company's sales guidance fell short of market expectations. "Nike is turning into a cost-cutting story, announcing a $2.5bn cost savings program as management is adapting to the reality of significant pressure within Sportswear, Jordan, and China," the analysts stated. They added that further details on the five-year outlook would be provided at an upcoming investor day, while information on when the Pace initiative would affect results would not be available until 2029. "It isn't out of the question that Nike can beat some of the guidance they just provided, but there really is no justification (in our view) for Nike to receive a premium multiple versus its growing peers," the note concluded.