Nike Reports Q1 Revenue Drop and Announces Major Restructuring Plan

Nike posted a mixed fiscal first-quarter earnings report showing revenue falling 4% to $11.21 billion and announced a restructuring plan called Pace that is expected to deliver $2.5 billion in savings while bringing layoffs starting in 2027, as CEO Elliott Hill works through steep declines in Greater China and specific segments.

The sports retail giant is confronting a deep operational reset as macroeconomic pressure, cautious consumers, and strategic missteps weigh heavily on its global portfolio. During a fiscal first-quarter earnings call, executives laid out a restructuring plan that will reshape the company’s operating model, realign geographic regions, and scale back production on key lifestyle products.

First-Quarter Revenue Slips 4% as Greater China Plunges 26 Percent

Net sales across the group are distributed geographically with North America representing 42.3%, Europe, Middle East, and Africa at 26.5%, China at 14.2%, Asia/Pacific and Latin America at 13.5%, and other regions at 3.5%. Products are sold primarily under the names Nike, Jordan, Converse Chuck Taylor, All Star, One Star, Star Chevron, and Jack Purcell. Footwear accounts for 66.9% of net sales, clothing for 28.1%, sports equipment for 4.8%, and other categories for 0.2%, with marketing executed through 1,034 stores worldwide, independent distributors, and e-commerce platforms.

The weakness was concentrated heavily in specific regions and brand divisions. Greater China proved to be the most severe drag, with revenue plunging 26% while company leadership described multiple seasons of pain. At the same time, Nike Sportswear fell low double digits while accounting for just under half of quarterly revenue, and Jordan Brand declined mid-teens.

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Despite that progress, our Nike performance business is not yet large enough to offset the pressure we’re seeing in Nike Sportswear, Jordan Brand, and Greater China.

Elliott Hill, CEO

Not all divisions struggled. Performance categories showed resilience, with running growing double digits for another quarter, global football posting strong double-digit growth across all four geographies, and North America basketball returning to growth. North America revenue reached $5.13 billion, edging past estimates.

Pace Operating Model Overhaul Brings Restructuring and Future Layoffs

To combat ongoing sluggishness and modernize its supply chain, Nike introduced an operating model overhaul dubbed Pace. The multi-year initiative is designed to streamline decision-making, eliminate duplication, and move resources closer to regional consumers. The corporate strategy aims to deliver approximately $2.5 billion in savings through fiscal 2031, alongside about $1 billion in implementation and restructuring costs over the life of the program.

However, the overhaul carries human and financial costs, including a 15-cent restructuring expense added to fiscal 2027 earnings per share. The company confirmed that the restructuring will result in fewer roles across the organization, with layoffs scheduled to begin in 2027. This marks the third round of job cuts announced by the sneaker giant this year.

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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.

Elliott Hill, CEO

As part of the operational realignment, Nike will organize into three distinct geographic regions—moving down from four—with teams expected to move into this new formation in Fiscal Year 2028. The company is also establishing a new campus in Bengaluru, India to bolster future technological and operational capabilities, recognizing India as an important growth market and manufacturing hub.

Nike Scales Back Retro Jordan Releases and Lifestyle Footwear

Industry veterans point to past strategic missteps as compounding the current retail slump.

To restore brand heat, Nike is actively pulling back on volume for iconic retro footwear lines. Executives admitted that the company had oversupplied its iconic retro product, particularly within the Jordan brand. By intentionally reducing the frequency of specific launches starting with the Air Jordan 1, Nike hopes to rebuild an exclusive scarcity model.

Meanwhile, the company issued a cautious full-year forecast, telling investors that revenue will continue to decline by a high-single-digit percentage through fiscal 2027.