Nike misses revenue forecast, heading for widespread layoffs

Nike's stock is plunging about 10% in early Wall Street trading after reporting weak first-quarter results and a cost-cutting plan. Revenue fell 4% to $11.21 billion, below expectations. The company plans to reduce operations and cut jobs after two consecutive quarters of declining revenue. CEO Elliott Hill informed employees of workforce reductions but did not specify the scale or locations.

Nike's stock is plunging about 10% in early Wall Street trading following the release of first-quarter results and a broad cost-cutting plan. The stock is on track for its worst year ever, down 47% since the start of the year. Quarterly revenue fell 4% year-over-year to $11.21 billion, missing analyst expectations of $11.33 billion. The company expects revenue to continue declining at a high single-digit rate later this year. Against this backdrop, Nike plans to reduce operations and cut jobs. CEO Elliott Hill, who returned from retirement in October 2024, wrote to employees that decisions on which positions will be eliminated will be made starting in 2027, but did not specify the scale or locations. Hill is facing a slowdown in China, its second-largest market, and growing competition from brands like Hoka and On. Last week, the company suffered another blow when soccer star Kylian Mbappé announced the end of his contract and a move to On. Last month, Nike was dropped from the S&P 100 index. The efficiency plan is expected to save about $2.5 billion by 2031, with pre-tax expenses of $1 billion, mainly for severance pay. Analyst Matt Powell noted that Nike made strategic mistakes, including cutting ties with retailers and making limited editions too available, which hurt demand.