Nike announces layoffs as part of restructuring plan

Nike on Thursday posted a mixed fiscal first quarter and announced a restructuring plan that will lead to layoffs starting next year.

The company also offered a full-year outlook, saying it expects revenues to decline by a high-single digit percentage in fiscal 2027.

Shares of Nike fell roughly 3% in extended trading Thursday.

Here's what the company reported for the period compared to what analysts expected, according to consensus estimates from LSEG:

Nike reported net income of $712 million, down 2% from $727 million the year prior.

Revenue fell 4% to $11.21 billion. The retailer said Nike brand revenues took a hit largely due to sustained declines in the China business. Revenue in the market dropped 26%.

Its North America revenue came in at $5.13 billion, just above estimates of $5.11 billion, according to StreetAccount. Nike also reported gross margin of 42.8% compared to estimates of 42.4%.

Nike also announced a change to its operating model to "position Nike for long-term growth." The strategy is expected to result in layoffs beginning in 2027, though the company did not provide any further details.

"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," CEO Elliott Hill wrote in a letter to the company.

The company said it plans to focus on its supply chain modernization, organizing into three geographies, building a new campus in India and changing its work and workforce. The strategy is expected to deliver approximately $2.5 billion in savings through fiscal 2031.

It'll also result in a 15-cent restructuring expense to fiscal 2027 earnings per share, the company added.

The retailer has been in the midst of a turnaround plan, focused on improving separate parts of its business at different rates based on priority. The Nike consumer has also been under increased macroeconomic pressure as geopolitical tensions and higher inflation lead to slower spending.

Shares of Nike have plummeted more than 40% this year.