Nike stock fell in after-hours trading on Thursday after the sportswear giant announced a restructuring plan that will lead to layoffs in 2027 and warned that revenue could decline by a high-single-digit percentage in fiscal 2027.
Shares of Nike (NKE) dropped roughly 4% in extended trading after the earnings report. The decline came despite Nike beating analysts’ expectations for quarterly earnings per share. Investors instead faced a weaker revenue result and a cautious outlook for the year ahead.
Nike stock (NKE) drops after earnings revenue miss
Nike reported fiscal first-quarter revenue of $11.21 billion, compared with $11.32 billion expected by analysts, according to CNBC. Earnings per share came in at 48 cents, ahead of the 43 cents expected, CNBC reported.
Nike’s net income was $712 million, down from $727 million a year earlier, while revenue declined 4%.
The company’s gross margin provided a positive point in the results, rising to 42.8%. CNBC said analysts had expected 42.4%.
Nike lays off workers as it targets $2.5 billion in savings
For Nike stock investors, the company’s restructuring plans were another key part of Thursday’s report.
Nike said its new operating model is intended to position the company for long-term growth. The changes are expected to result in layoffs beginning in 2027, although the company did not say how many jobs would be affected.
The plan includes modernizing Nike’s supply chain, organizing the business into three geographies, building a new campus in India and changing its work and workforce.
Nike expects the strategy to generate approximately $2.5 billion in savings through fiscal 2031. The restructuring will also create a 15-cent expense to fiscal 2027 earnings per share.
CEO Elliott Hill acknowledged the impact of the changes in a letter to employees, saying the work would result in fewer roles across Nike, according to CNBC.
