United States: Nike’s turnaround is facing another difficult test after the sportswear giant warned of a steep full-year revenue decline, announced further job cuts and reported deep weakness in Greater China.
The company posted first-quarter sales of about $11.2 billion, below analysts’ average estimate of $11.32 billion, according to LSEG data cited by Reuters. Greater China sales fell 26% on a constant-currency basis, intensifying concern about the pace of CEO Elliott Hill’s recovery plan.
Nike expects a difficult fiscal year
The company forecast a high-single-digit percentage decline in fiscal 2027 revenue. That outlook disappointed investors who had been looking for clearer evidence that the brand’s restructuring was beginning to produce sustained growth.
Nike’s challenge is not simply one weak quarter. The company is trying to rebuild product momentum, repair wholesale relationships and regain relevance in categories where newer competitors have taken share.
China is one of Nike’s biggest problems
Greater China has become a particularly difficult market. Constant-currency sales fell 26% in the first quarter, continuing a prolonged run of weakness.
Competition from local and international brands has intensified, while China’s broader consumer environment remains challenging. A prolonged property downturn and cautious household spending have made the operating environment harder for many discretionary brands.
More job cuts are coming
Nike said it plans additional job reductions as part of a wider restructuring. The company had not disclosed the number of positions affected in the Reuters report.
Cost cutting can improve efficiency, but layoffs alone cannot restore brand momentum. Nike ultimately needs stronger products and demand, particularly in important international markets.
The company is reorganizing its global business
Nike is also restructuring its geographic organization as Hill tries to simplify operations and make the company more responsive to consumers.
Large global brands can become slower when product decisions pass through multiple layers. A leaner structure may help Nike react faster to changing footwear and apparel trends.
Why competition has become tougher
Nike remains one of the world’s best-known sports brands, but consumers now have more choices. Running specialists and fashion-driven competitors have gained attention, while established rivals continue investing heavily in products and marketing.
The company also has to balance performance categories with lifestyle products such as Sportswear and Jordan Brand. Hill has said the performance business is not yet large enough to offset weakness elsewhere.
Investors are watching the turnaround timeline
Turnarounds at companies of Nike’s scale take time because product pipelines, wholesale relationships and brand perception cannot change instantly. Investors therefore focus on signs that revenue declines are narrowing and margins are stabilizing.
A steep annual revenue decline would push that recovery further into the future and increase pressure on management to demonstrate that restructuring is producing measurable results.
China weakness connects Nike to a larger economic story
Nike’s difficulties in China are also relevant beyond the company. Global consumer brands often provide a window into household spending and competitive conditions in the Chinese market.
China’s manufacturing and services surveys improved in September, but property weakness continues to weigh on domestic confidence. Read our related report: China property slump persists as home prices remain under pressure.
What could improve the outlook
Investors will look for stronger product launches, stabilization in Greater China, better wholesale execution and evidence that cost reductions are improving profitability without damaging innovation.
Nike also needs to show that it can win consumers in both performance sports and lifestyle categories. Stronger demand in North America or Europe could offset some weakness, but China remains too important to ignore.
What happens next
Future quarterly reports will reveal whether the expected revenue decline is concentrated early in the year or persists across fiscal 2027. Guidance on job reductions and regional performance will also be closely watched.
The stock may remain sensitive to any evidence that China is stabilizing — or weakening further — because investors are already questioning how quickly Hill’s strategy can restore growth.
Bottom line
Nike is still a global sportswear giant, but its turnaround is proving difficult. First-quarter revenue missed expectations, China sales fell sharply and management is preparing more job cuts while forecasting a high-single-digit annual revenue decline.
The central question is whether restructuring can translate into better products and stronger consumer demand before prolonged weakness further erodes market share.
External source: Reuters — Nike plans more job cuts as turnaround struggles.
Related: U.S. September jobs growth slows sharply to 29,000.
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