Nike Shares Plunge 10% on Weak Outlook, Layoffs — SkimNews
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- Nike shares fell roughly 10% in premarket trading Friday after fiscal Q1 revenues dropped 4% to $11.2 billion, with the stock now down nearly 45% year-to-date
- CEO Elliott Hill flagged continued weakness in Greater China, NIKE Sportswear, and Jordan Brand, partially offset by North America growth, and said the company has 'more work to do' in those areas
- Nike unveiled its 'Pace' operating model targeting $2.5 billion in cost savings by 2031, with role reductions beginning in calendar year 2027 and beyond
- Nike has already cut 775 distribution-center jobs in January and 1,400 tech employees in April; net income fell to $712 million from $727 million a year earlier
- Citi analysts labeled Nike a 'cost-cutting story,' said sales guidance came in below market expectations, and argued there is 'no justification' for a premium multiple versus growing peers
- The Pace program includes establishing a new campus in India and reorganizing Nike's global supply chain into three geographic structures to streamline operations
Why it matters: Nike has now lost nearly 45% of its value year-to-date, and Citi's characterization of it as a 'cost-cutting story' marks a sharp break from the growth narrative that long supported a premium multiple. With high-single-digit revenue declines forecast for 2027 and 2,175 jobs already eliminated this year, management's $2.5B savings plan signals the company is conceding it cannot grow its way out of weakness in Greater China and its core Sportswear and Jordan brands.
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