Nike announces restructuring plan with $2.5 billion cost cuts after Q1 revenue miss
Nike said it will reshape its operating model through 2031, cutting jobs and consolidating geographies to achieve $2.5 billion of savings. The plan follows a first‑quarter revenue decline to $11.2 billion and a profit drop to $712 million, prompting a high‑single‑digit revenue decline outlook for fiscal 2027. CEO Elliott Hill outlined the changes and noted weaker consumer spending and challenges in Greater China. Shares fell about 4% in after‑hours trading.
Why it matters
The company expects revenue to fall in high‑single digits in fiscal 2027, which could pressure earnings and cash flow. The announced $2.5 billion cost‑saving program aims to offset some of the revenue weakness, but the restructuring may also lead to short‑term disruption and further share‑price volatility.
Key facts
- 1Nike reported first‑quarter sales of $11.2 billion, below analysts' estimate of $11.32 billion. aol.com
- 2First‑quarter gross margin rose 60 basis points to 42.8%. aol.com
- 3Net profit for the quarter was $712 million, down 2% year over year. sportico.com
- 4Nike expects revenue to decline in high‑single digits in fiscal 2027. aol.com
- 5The restructuring program targets $2.5 billion of savings through fiscal 2031. aol.com
- 6Approximately $1 billion of the savings is expected to come from employee‑related costs. sportico.com
Summary written by AlphAI from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.