Nike Puts Job Cuts Ahead of $2.5 Billion in Savings

Nike posted first-quarter revenues of $11.2 billion, down 5 percent on a currency-neutral basis, then told investors sales will keep falling through fiscal 2027 and into 2028. The new Pace program promises about $2.5 billion in savings, with most of that money arriving in fiscal 2029 and 2030.

Results for the quarter ended August 31, 2026, went out after the close on October 1, and management held a conference call beginning at 2:00 p.m. PT. President and CEO Elliott Hill said the print matched the company’s own forecast. The year ahead does not.

The Quarter Matched Nike’s Own Forecast

Reported sales were down 4 percent. Diluted earnings were $0.48 a share, two cents under last year and ahead of the 44-cent area the Street had marked. Gross margin rose 60 basis points to 42.8 percent, which Dave Denton, the new chief financial officer, tied mainly to lower warehousing and logistics costs. Selling and administrative expense fell 3 percent to $3.9 billion even as demand-creation spending, the brand’s marketing line, rose 5 percent to $1.3 billion around the World Cup.

Net income was $712 million, down 2 percent from $727 million. Inventories were $7.8 billion, down 3 percent. Cash and short-term investments were $8.4 billion, and the company returned about $610 million through dividends, up 3 percent. Leverage sits near two times. None of that stopped the stock from breaking to a session low of $31.97 on October 2 before closing at $33.87.

Q1 FY2027 LINE BY LINE

Direct was the weaker channel. Nike Brand digital fell 13 percent and Nike-owned stores fell 5 percent. Wholesale, the business the last decade tried to sideline, only slipped 1 percent. North America grew 2 percent and carried the quarter. Greater China, at $1.18 billion, was 10.5 percent of sales and the hole that would not close.

Last Year’s $16 Billion Performance Book Grew Again

Hill, who returned as chief executive in October 2024, has staked the recovery on what he calls the Sport Offense: small teams built around a sport, each on the hook for revenue, margin and share. Last fiscal year that performance book reached $16 billion. It grew another high-single-digit rate in the first quarter, and would have been up low double digits if Greater China’s reset were stripped out. Running, global football, tennis and golf each grew double digits. Basketball was up double digits in North America. Training rose globally, led by EMEA.

Running is the cleanest proof. Hill said max-cushioning share, led by Vomero, has nearly tripled over the past year, and he walked through a new race-day stack: Pegasus Plus 2 in August, Alphafly 4 in September, then Swooshfly and Nike Apex on October 1. Apex, he said, delivers 40 percent more energy return than Alphafly 3. In football, World Cup team-kit sales doubled versus the 2022 tournament, and club kits rose in the high teens. Women’s basketball signature sales are up nearly 500 percent from fiscal 2022 to fiscal 2026, and the Caitlin 1 opened in 5,000 doors, twice the usual signature run, on the same day as the earnings call.

Those sports still make up only about 35 percent of sales. Hill said the quiet part in one sentence.

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.

Elliott Hill, President and CEO, NIKE, Inc. Q1 fiscal 2027 earnings call

Denton, who joined on August 17, put the same split in dollars. Sportswear and Jordan, including men’s, women’s and kids, were a high-single-digit drag on the whole company. Performance grew. The rest of the bag did not.

Sportswear Still Pays Half the Bill

Nike Sportswear accounted for just under half of first-quarter revenue and fell by a low-double-digit rate. Hill listed three causes: a planned cut in Dunk, aged high-volume footwear that missed, and what he called a lack of energy in lifestyle that is hitting traffic. “The consumer is cautious. But as the leader in the industry, it’s on us to bring more creativity to sportswear,” he said.

Air Force 1 is a stable full-price franchise again, he said, through new materials and seasonal color. Running-inspired shoes such as the P-6000 and Vomero 5 grew strong double digits. Studio Fleece for women was the best-performing apparel collection in the company for the quarter. The lesson he drew is that sportswear is not one shopper, so the category will be broken into smaller briefs the way performance already is.

Dunk Revenue Was Cut Nearly in Half

The Dunk cut was the one number Hill sized. Revenue from that franchise fell nearly 50 percent in the quarter, a headwind of about $200 million. Some older, higher-volume shoes then sold through below plan, which has already hit future order books as Nike works with wholesale partners to clear extra stock. North America will feel the next wave of that cleanup first.

Jordan Goes Back to Scarcity

Jordan Brand is 13 percent of the global business. Revenue fell by a mid-teens rate. Hill said the company has been oversupplying iconic retro product and will cut the volume and frequency of specific retro launches, as it has already done with Air Jordan 1. Wholesale partners are in those talks. Cleats, golf and training are the sport extensions he wants to grow. The reason, he said, is the logo.

“When consumers see the Jumpman, it should feel special, it should feel earned,” Hill told the call. “Every decision we’re making is designed to ensure the Jordan Brand remains as coveted a decade from now as it has been for the past several decades.” That is a brand argument. It is also a sales cut in the largest market, by design, in the same year the company is already guiding revenue down.

Greater China’s Reset Runs Through Several Seasons

Greater China revenue fell 26 percent on a currency-neutral basis, 22 percent as reported, to $1.18 billion. A new leadership team has been in place for six months. In July Nike said it would clean up the digital side of that market. Hill said the company is dropping distribution that does not match its plan, so that deep discounting eases, and will anchor Nike and Jordan online around official flagships on Tmall, JD and Douyin plus Nike.com and the Nike app.

Most partner doors in Greater China have not been refreshed in seven years, he said. The counter-example is Shanghai’s House of Innovation, which has grown for 10 straight months after a sport-led reset. Digital cleanup, he warned, will take multiple seasons, and near-term revenue and profit in China will take the hit. Running in the region still grew double digits for a sixth straight quarter, which is the Sport Offense working in a market that is otherwise being made smaller on purpose.

Denton said the same supply cuts, in Sportswear, Jordan and China, will pressure reported revenue for the rest of fiscal 2027 and into 2028. Fiscal 2027, which ends May 31, 2027, is now guided to a high-single-digit revenue decline, with EBIT falling by a larger percentage because of gross-margin pressure, fixed-cost deleverage and higher input costs. Second quarter alone carries about 400 basis points of extra headwind from last year’s Cyber Week promotions in EMEA and a tougher North America sell-in compare. Adjusted earnings are guided to $1.15 to $1.35 a share, excluding about $0.15 of Pace costs. Analysts had been near $1.66. Last fiscal year’s sales were $46.4 billion.

Most of the $2.5 Billion Lands After 2028

Pace folds in a cost plan announced in March 2026 and goes further. Hill’s purpose line was blunt: accelerate the Sport Offense, change how and where people work, move decisions closer to the consumer, and build the muscle to go faster. Denton put a price on it. About $2.5 billion of cumulative savings through fiscal 2031, about $1.0 billion of pretax charges, mostly employee-related, over the same span, on top of about $300 million of severance already booked in fiscal 2026. About $300 million of Pace cost is expected in fiscal 2027. A portion of the savings is meant to be put back into product, brand and sport. The rest is the lower cost base.

The catch on timing is not hidden. Denton said the company has already started, but the majority of the savings should show up in fiscal 2029 and 2030, with full run-rate into fiscal 2031. That is three to five fiscal years after a quarter in which China dropped 26 percent and Sportswear, half the bag, went backwards. Neil Saunders, managing director at GlobalData, said the overhaul is not inherently wrong and still reads as a sign the current model is “not really fit for purpose.”

THE PACE CALENDAR

1. March 2026: Nike announces a cost realignment that Pace later absorbs.
2. August 17, 2026: Dave Denton starts as chief financial officer.
3. October 1, 2026: First-quarter results and Pace are unveiled on the earnings call.
4. November 16 and 17, 2026: Investor Day is set for a longer-term growth algorithm.
5. Calendar 2027: Decisions on affected roles begin, Hill told staff.
6. Fiscal 2028: Teams move into three geographies, Americas, APGC and EMEA.
7. Fiscal 2029 and 2030: Majority of the $2.5 billion in savings is expected.
8. Fiscal 2031: Full realization of the program continues.

Hill closed the prepared remarks with a college-football story from Austin, Texas versus Ohio State, and a six-day campus activation that sold through Texas-specific Studio Fleece and Solar Fleece. One week on campus, he said, does not change the work in front of the company. It was a reminder of what 1,000 university partnerships, reaching more than 13 million students, can still do when the brand shows up in person.

Bengaluru Grows as Beaverton Loses Layers

In a memo to staff, Hill said Pace rests on four moves, and that the work “will result in fewer roles across Nike.” He asked people not to treat leaked totals as fact. “Anything you may see in media reports around impacts is speculative because we do not yet know the number of roles or specific locations of positions,” he wrote. Decisions start in calendar 2027 and beyond. Where local consultation is required, proposals stay open until that process finishes.

FOUR MOVES INSIDE PACE

• Supply chain: Shift a mostly fixed network toward a more flexible, responsive and cheaper one.
• Three geographies: Americas (North and South America), APGC (Asia Pacific plus Greater China, led from Singapore) and EMEA, with teams moving in fiscal 2028.
• Bengaluru campus: A new India site for full-time staff supporting Nike, Jordan Brand and Converse, with existing India teams moving in phases and the site growing over several years.
• Workforce: Add capability in some functions, cut duplication in others, and reduce the overall number of roles over time.

Some roles that now support Asia from Beaverton, Oregon, will move closer to those markets. APGC leadership will sit in Singapore. Hill called India an important growth market and manufacturing hub and said the Bengaluru campus is a long-term bet on talent, including for India itself. The company has not named a site, a dollar figure or a headcount for that campus; the location is due in 2027.

Nike listed about 73,000 employees at the end of May, down from 77,800 a year earlier, with about 10,600 at the Beaverton campus. Pace follows earlier 2026 cuts of nearly 800 jobs at U.S. distribution centers in Tennessee and Mississippi, and about 1,400 operations roles across North America, Europe and Asia that the company said was less than 2 percent of global headcount. Converse ran its own round, without a published total. Operating overhead already fell 6 percent this quarter, to $2.7 billion, on lower wage-related expense.

The S&P 100 Seat Is Already Gone

S&P Dow Jones Indices removed Nike from the S&P 100 before the open on September 21, 2026, in the quarterly rebalance announced on September 4. Dell Technologies, Palo Alto Networks, Arista Networks and Sandisk went in. Honeywell Aerospace, Simon Property Group and Colgate-Palmolive went out with Nike. The index provider said the shuffle makes each benchmark more representative of its market-cap range. Nike remains in the S&P 500 and the Dow. It had sat in the S&P 100 since late 2008.

The stock closed at $35.15 on October 1, then at $33.87 on October 2, down $1.28 or 3.64 percent, on volume of 142.7 million shares. Market value at that close was about $50.25 billion. The shares last traded near these prices in 2013 and have fallen from a peak of $179.10 in November 2021. The quarterly dividend is $0.41, and Denton said keeping and then growing that payout remains a priority.

The market sold the outlook, not the 48-cent beat. Earnings held up because overhead was cut and gross margin ticked higher while the company pulled product out of Dunk, Jordan retro and China digital. The bill for that cleanup is more lost sales into 2028. The $2.5 billion Pace is supposed to pay for the next version of the company shows up after that. Hill and Denton said they will put a longer-term growth algorithm on paper at Investor Day on November 16 and 17.

Disclaimer: This article is news reporting and analysis of Nike’s public earnings, guidance and Pace program, and it is for information only. It is not investment advice, a recommendation to buy or sell NKE or any other security, or a forecast of returns. Readers should consult a licensed financial adviser or other qualified professional who can review their own holdings, time horizon and risk before making any investment decision. Revenue, earnings, savings, headcount and share-price figures here reflect company statements, index notices and market prints as of the dates named in the piece and can change with later filings, Investor Day detail or trading.