Nike plans more job cuts as it forecasts steep revenue drop
NKE•Nike plans more job cuts as part of a restructuring expected to save about $2.5 billion through fiscal 2031, and forecasts fiscal 2027 revenue to decline by a high-single-digit percentage. First-quarter sales fell about 4% to $11.21 billion, while China revenue fell 26%.
1. Restructuring and outlook
Nike plans to cut more jobs and reorganize its global divisions into three regions: the Americas, Asia Pacific and Greater China, and EMEA. The number and locations of the cuts are not yet known, and the company expects to begin notifying employees in 2027. The restructuring is expected to deliver about $2.5 billion in savings through fiscal 2031, with most savings in fiscal 2029 and 2030.
2. Sales and China weakness
Nike expects fiscal 2027 revenue to decline by a high-single-digit percentage; analysts had estimated a drop of about 2%. First-quarter sales fell about 4% to $11.21 billion, below analysts’ average estimate of $11.32 billion. China sales fell 26% on a constant-currency basis, while North American sales rose 2%. CEO Elliott Hill said Nike’s performance business was not yet large enough to offset pressure in sportswear, the Jordan brand and Greater China.
3. Margins and changes
Gross margin rose 60 basis points to 42.8% in the quarter ended August 31, helped by lower warehousing and logistics costs. Nike also plans to open a new campus in India. Hill said Nike would update its targets through the fiscal year beginning in November.
