Nike revenues fell 5% year-on-year on a constant currency basis for the first quarter of fiscal 2027 to $11.2 billion, the brand said on Thursday, missing analyst expectations of $11.35 billion. Shares fell 6% in after-hours trading, and Nike stock now sits at the lowest level it has since 2013. Nike was also delisted from the S&P 100 for the first time in 18 years on September 21. (Q1’s performance was, however, in line with Nike’s own expectations.)
“For the first quarter, results were in line with our expectation. Last fiscal year, we grew the [Nike brand performance portfolio] business to $16 billion. We built on that foundation this quarter, growing Nike performance by another high-single digits,” president and CEO Elliott Hill told investors on Thursday’s call. “Despite that progress, our Nike performance business is not yet large enough to offset the pressure we're seeing in Nike sportswear, Jordan brand, and greater China. We’re taking deliberate actions to strengthen those businesses, but realizing the full benefit of those efforts will take time.”
Hill also welcomed new CFO Dave Denton, who joined the company on August 17. “Dave brings deep financial expertise, strong operational leadership, and a proven track record of helping world-class companies grow,” he said.
On the call, the pair introduced changes to Nike’s operating model under a program called Pace, which will involve geographical reorganization and layoffs across the company. “The purpose of Pace is clear, to accelerate the sport offense. It will change how and where we work, move decisions and roles closer to the consumer and build capabilities that will allow us to move faster,” Hill said. “The sport offense has proven itself. Pace is how we scale it.” Pace is expected to result in $2.5 billion in savings, Denton said.
The new plan arrives at a rough moment for Nike. Last month, Kylian Mbappé left Nike for challenger brand On, in a move that harkened back to Roger Federer’s 2018 exit. In recent years, big-name athletes including Lamine Yamal, Harry Kane and Ousmane Dembélé all left for competitors. It’s a reflection of Nike’s waning sportswear dominance, a trajectory Hill sought to put a halt to when he joined the company two years ago and introduced his Sport Offence turnaround plan — which Pace will now accelerate.
First-quarter revenues for the Nike brand were $11 billion, down 4% year-on-year, primarily due to declines in Greater China and EMEA, which were partially offset by North American growth. Revenues for Converse were down 28% to $263 million. By channel, Nike direct-to-consumer (DTC) revenues took a hit, down 9% year-on-year to $4.1 billion. Nike’s wholesale fared better, with revenues down 1% to $6.8 billion.
Hill highlighted three focus areas that need special attention moving forward: Nike Sportswear, the Jordan brand, and Greater China, where revenues fell 26% in the first quarter. For Sportswear, Nike will better organize franchises into more specific focus areas, as it does with its performance lines. “The sportswear consumer isn’t one audience. It’s a collection of consumers with distinct needs, tastes, and motivations,” Hill said. For Jordan, the plan is to reduce the frequency of launches, leaning into the brand’s original scarcity model. “When consumers see the jump man, it should feel special,” Hill told investors. And in China, Hill noted the progress the new leadership team has made over the past six months, and detailed plans to tighten up the region’s digital channels and refresh physical doors.
Hill also highlighted Nike’s three running sneaker innovations that make up the brand’s new “race day system of speed”: the Nike Apex, the Alphafly 4, and the Swooshfly. The Alphafly 4 will launch in October 2026; the Apex in January 2027; and the Swooshfly in February 2027.
Under the Pace program, Nike will open a campus in Bangalore, India, to help evolve the company’s supply chain. Nike will also reorganize into three key geographies: the Americas (North and South America), APGC (combining Asia-Pacific and Greater China), and EMEA, which will continue to operate as it does today. “We’ll reduce layers and move more resources to the country’s territories and cities and give our local teams more ownership of winning in their markets,” Hill said, noting that these changes will take place in fiscal 2028. Lastly, through Pace, Nike will reduce the number of roles at the company. Layoffs will begin in the 2027 calendar year.
Most savings derived from Pace will be realized in fiscal 2029 and 2030, Denon told investors, adding that the full realization of the program will carry over into fiscal 2031. Nike executives will share more insight into the program at Nike’s November investors day.
In the nearer term, Nike expects revenues to decline high-single digits in fiscal 2027. “We are making deliberate choices across portions of the portfolio, particularly in Nike Sportswear, the Jordan brand and Greater China to improve the health of these businesses over time,” Denon said. “We will continue to take actions to reduce supply across key parts of the marketplace in support of a healthier marketplace environment and stronger full-price realization. We expect those actions will create pressure on reported revenues for the remainder of fiscal 2027 and into 2028.”
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