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Nike (NKE) shares fell to a 13-year low near $32 after a first-quarter revenue miss, a high-single-digit fiscal 2027 sales decline forecast and a new restructuring.
- Nike stock fell nearly 9% to about $32 on Oct. 2, its lowest level since 2013.
- First-quarter revenue of $11.2 billion missed the $11.3 billion consensus.
- Nike expects fiscal 2027 revenue to fall by a high-single-digit percentage.
Lead
Nike (NYSE: NKE) shares dropped nearly 9% to about $32 on Friday, Oct. 2, their lowest since 2013. The selloff followed fiscal first-quarter results reported after the close on Thursday, Oct. 1. Revenue of $11.21 billion, down 4% from a year earlier, fell short of the roughly $11.3 billion consensus. Management also guided fiscal 2027 revenue down by a high-single-digit percentage and announced a restructuring program with job cuts.The stock had closed at $35.15 on Thursday. It is now about 76% below its 2021 peak near $179 and down more than 40% this year.
What Did Nike Report for the First Quarter?
Nike reported revenue of $11.21 billion, down 4% on a reported basis and 5% currency-neutral, while earnings beat expectations. Diluted earnings per share were $0.48 against a consensus near $0.43, compared with $0.49 a year earlier. Net income was $712 million, down 2%.
Gross margin rose 60 basis points to 42.8%, ahead of the 42.4% forecast. The margin gain and cost control cushioned the earnings line but did not offset the sales shortfall.
The weakness was concentrated in a few areas:
- Greater China currency-neutral revenue fell 26%.
- Revenue also declined in Europe, the Middle East and Africa.
- Nike Direct sales fell 8%, and Nike Brand Digital fell 13%.
- Converse sales dropped 28%.
- Wholesale slipped 1%, and North America came in at $5.13 billion, slightly above estimates.
Nike Sportswear, which accounts for just under half of revenue, declined by a low-double-digit percentage.
Why Did Nike Shares Fall to a 13-Year Low?
Nike shares fell because the fiscal 2027 outlook was far weaker than investors had priced in, and the revenue miss showed the turnaround is not yet producing growth. The company forecast adjusted diluted earnings per share of $1.15 to $1.35 for the fiscal year. That range excludes restructuring costs of roughly $0.15 per share.
The stock first slid about 4% in after-hours trading, to around $32 to $34 depending on the session, then extended losses the next morning. The decline reflects a longer pattern. Nike has cut back some wholesale partnerships to push direct sales, and that shift has left it exposed as digital traffic softened. Newer performance brands have also taken share in running and lifestyle footwear.
What Is the Nike Pace Restructuring?
Nike Pace is a new operating model and cost-reduction program that is intended to deliver about $2.5 billion in savings through fiscal 2031. It has four main parts:
- Modernizing the supply chain.
- Organizing leadership into three international markets.
- Opening a new campus in India.
- Reducing the workforce.
Chief Executive Elliott Hill said the work "will result in fewer roles across Nike." Decisions on affected positions begin in calendar 2027 and continue beyond. Nike did not disclose a total headcount reduction.
The program carries costs of its own. Nike expects about $1.0 billion in additional pre-tax charges over its life, including roughly $300 million in fiscal 2027. This is the latest in a series of cost actions since Hill returned as CEO in late 2024.
What Does the High-Single-Digit Sales Decline Mean for Fiscal 2027?
A high-single-digit decline implies Nike's revenue will fall again for the full fiscal year, which began in June. The prior fiscal year ended with fourth-quarter revenue of $10.97 billion, down 1% as reported. That quarter was helped by an expected tariff refund of nearly $986 million after the Supreme Court struck down many global duties.
The new guidance means sales will shrink faster than in the year just completed, while the restructuring savings arrive only gradually. Greater China is the most visible pressure point. Nike is also working through inventory and product-mix changes in North America and Europe, which the first-quarter results show are still weighing on volumes.
Strategic Context
Nike's strategy under Hill centers on rebuilding relationships with wholesale partners, refocusing on sport-specific product and reducing reliance on a few heritage franchises. First-quarter results show the margin side of that plan is working, with gross margin up 60 basis points. The sales side is not. Converse's 28% decline and the drop in digital sales show that brand heat has not returned across the portfolio.
The restructuring signals that management is prioritizing cost resets while the top line recovers. Delays in decisions on job cuts until 2027 reduce near-term disruption but extend the period in which the savings are not realized.
Outlook
Nike enters the second quarter with the stock at multi-year lows, a forecast of lower fiscal 2027 sales and a restructuring that will not deliver most of its savings for several years. The 52-week high of about $75 sits far above the current price, and recent technical support near $35 has broken. The next signals are the holiday-quarter results, any update on China demand and the timing and scale of the workforce reductions that begin in 2027.
