Nike Shares Fall as Weak Sales and China Slump Overshadow Earnings Beat

Nike reported fiscal first-quarter revenue of $11.21 billion, below the $11.32 billion expected by analysts and down 4% from a year earlier. Earnings per share came in at 48 cents, ahead of the 43-cent consensus estimate. Net income declined 2% to $712 million from $727 million a year earlier.

Performance varied significantly across regions. North American revenue reached $5.13 billion, slightly ahead of expectations of $5.11 billion, while gross margin of 42.8% also exceeded the 42.4% forecast. Greater China remained the biggest pressure point, with revenue falling 26% as Nike continues working to rebuild its business in the market.

Weakness also extended across several important product categories. Nike Sportswear, which accounted for just under half of quarterly revenue, recorded a low-double-digit percentage decline. CEO Elliott Hill said improvements in Nike’s performance business were not yet large enough to offset pressure across Sportswear, Jordan Brand and Greater China.

The company expects those challenges to continue through fiscal 2027. Nike forecast full-year revenue to decline by a high-single-digit percentage and expects adjusted earnings per share of between $1.15 and $1.35. Management said its turnaround initiatives are progressing, but the full benefits will take time to materialize.

Nike also introduced a restructuring initiative called “Pace,” designed to simplify the organization and improve productivity. The plan will include another round of layoffs beginning in 2027, although the company has not disclosed how many positions will be eliminated. It marks the third round of job cuts announced by Nike this year.

Under Pace, Nike plans to modernize its supply chain, reorganize operations into three geographic regions and establish a new campus in India. The three regions will cover the Americas; Asia Pacific and Greater China; and Europe, the Middle East and Africa. Nike expects the restructuring to generate approximately $2.5 billion in savings through fiscal 2031 while creating additional capacity for investment in products and innovation.

The latest results show that Nike’s turnaround remains a work in progress. Better-than-expected earnings and resilient North American sales provided some positive signals, but weaker lifestyle demand, persistent challenges in China and a cautious consumer environment continue to weigh on the business. With Nike shares already down more than 40% this year, investors are increasingly focused on whether the restructuring can translate into renewed sales growth and stronger brand momentum.