Nike Stock Falls After Revenue Miss

Nike Stock Plunges 8% as Sales Slump and Layoffs Put CEO Elliott Hill Under Pressure

Business

Nike stock drops 8% after revenue misses forecasts, China sales weaken and planned layoffs raise fresh questions about CEO Elliott Hill’s recovery plan.

Nike stock fell 8% in premarket trading after the company missed revenue estimates.
Revenue dropped 4% to $11.21 billion, below analysts’ $11.33 billion forecast.
Layoffs are planned from 2027, as CEO Elliott Hill pushes cost-cutting measures.
Fiscal 2027 revenue is expected to fall by a high single-digit percentage, adding pressure on Nike’s recovery plans.
Gross margin rose to 42.8%, but improved profitability has yet to offset weaker sales and a declining outlook.

Nike stock fell as much as 8% in premarket trading on Friday, October 2, after the sportswear giant reported weaker-than-expected revenue and announced plans to cut jobs. The results put fresh pressure on CEO Elliott Hill, who is working to revive sales and get the business back on track.

Nike reported $11.21 billion in first-quarter fiscal 2027 revenue, down 4% from a year earlier and below analysts’ estimate of $11.33 billion. Earnings per share also slipped to $0.48 from $0.49 a year ago.

Is Nike facing a temporary setback or a deeper sales problem?

The outlook offers little comfort. Nike expects revenue to fall by a high single-digit percentage in fiscal 2027. Reuters reported that sales in China fell 26% on a constant-currency basis in the first quarter, as local rivals added pressure in a key market.

Nike is also reshaping its business through a plan called Pace. The changes cover its global structure, supply chain and workforce. The company expects the plan to deliver about $2.5 billion in savings through fiscal 2031, though restructuring will bring additional costs.

Hill acknowledged the challenge, saying, “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.”

Can cutting costs solve a problem rooted in falling sales?

Nike has not disclosed how many jobs will go. In a message to employees on October 1,

Elliott Hill said, “This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty.” Decisions on affected roles are expected to begin in 2027 and beyond.

There is one bright spot. Nike’s gross margin rose 60 basis points to 42.8%, helped by lower warehousing and logistics costs.

CFO Dave Denton said, “We delivered first quarter results consistent with our expectations, supported by improved gross margin and disciplined cost management.”

Will better margins be enough to bring customers back?

Business Honor observes that Nike’s challenge is bigger than reducing expenses. The company must turn cost savings into products customers want to buy. Until sales improve, a leaner business may not be enough to restore investor confidence.

FAQs

Why did Nike stock fall?

Nike stock fell after the company reported lower-than-expected revenue and forecast a high single-digit revenue decline for fiscal 2027.

How much revenue did Nike report in its first quarter?

Nike reported $11.21 billion in revenue for the first quarter of fiscal 2027, down 4% from the previous year.

Is Nike planning layoffs in 2027?

Yes. Nike said decisions affecting employees would begin in 2027 and beyond. The company has not yet confirmed the total number of roles affected.

What is Nike's Pace plan?

Pace is Nike's operating plan to improve efficiency, reorganize its business, modernize its supply chain and reduce costs. Nike expects about $2.5 billion in cumulative savings through fiscal 2031.