Full Breakdown
Nike Misses Q1 Forecast, Launches $2.5 B “Pace” Restructuring Amid China Sales Slump
By Drooid · · How we work
Core Event: Earnings Miss and Restructuring Announcement
Nike reported fiscal Q1 revenue of $11.2 billion, down 4 % YoY, and net income of $712 million, down 2 %. The figures fell short of the $11.32 billion consensus, triggering a 4 % stock dip in extended trading on Oct 1. Nike also unveiled “Pace,” a re-organization into three geographic regions, supply-chain modernization, a new Bengaluru campus, and a target of $2.5 billion in cost savings through fiscal 2031. Workforce reductions begin in calendar year 2027.
Background & Context: China Weakness and Prior Layoffs
Revenue in Greater China dropped 26 % (constant currency), the ninth straight quarter of decline, as domestic competitors gain share. Earlier layoffs included 775 U.S. distribution jobs (Jan.) and roughly 1,400 tech positions (Apr.).
Data & Statistics
- Revenue: $11.2 B (-4 % YoY)
- Net income: $712 M (-2 % YoY)
- Gross margin: 42.8 % (up 60 bps)
- China revenue decline: 26 % YoY
- Cost-savings target: $2.5 B by FY 2031
- Share performance: down 10.36 % pre-market after the announcement; roughly 45 % decline YTD.
Official Statements & Responses
President and CEO Elliott Hill said the restructuring will “accelerate and scale” Nike’s “Sport Offense” strategy, bring decisions closer to markets, and support greater investment in product innovation and brand storytelling. He highlighted the Bangalore campus as a hub for Nike, Jordan Brand and Converse, noting India’s role as a growth market and manufacturing base.
Conflicting Reports & Gaps
Nike projects a high-single-digit revenue decline for FY 2027, versus a 2.4 % decline expected by the market. No exact headcount for future layoffs has been disclosed.
Verbatim Quotes
What’s Next
Details on “Pace” will be shared at Investor Day on Nov. 16–17. Workforce reductions start in 2027, with geographic realignment effective FY 2028. Investors will watch how Nike addresses the China slump and meets its cost-saving goals.
