Nike reported mixed results for its fiscal first quarter on October 1, 2026, with earnings per share slightly beating expectations at 48 cents compared to the forecasted 43 cents, while revenue came in just below estimates at $11.21 billion versus $11.32 billion expected. Despite this, net income fell 2% year-over-year to $712 million, driven primarily by a 26% revenue decline in its China market, which has been a persistent challenge for the company. CEO Elliott Hill acknowledged the difficulties in China and emphasized the company’s urgency in addressing the situation, alongside noting softness in its sportswear and Jordan Brand segments.

The retailer’s North America sales were marginally above analyst predictions at $5.13 billion, contributing to a gross margin of 42.8%, slightly outperforming the anticipated 42.4%. However, the lifestyle sector within Nike’s business showed a downturn, with sportswear revenue dropping by a low-double digit percentage amid cautious consumer spending and decreased foot traffic. Hill highlighted the need for innovation in sportswear to rejuvenate customer interest, noting that the company is not yet offsetting the sales pressures seen in key areas.

As part of its strategic efforts to drive long-term growth, Nike announced a significant restructuring plan named Pace, intended to streamline operations by organizing the business into three geographic regions: the Americas; Asia Pacific and Greater China; and Europe, the Middle East, and Africa. This restructuring will lead to layoffs starting in 2027, marking the third round of job cuts Nike has made this year, although the company has not specified the total number of positions affected. The Pace plan aims to modernize the supply chain, improve decision-making speed, and deliver approximately $2.5 billion in savings by fiscal 2031.

Nike also disclosed that the restructuring would incur a 15-cent per share expense to adjusted earnings in fiscal 2027. Hill expressed the company’s commitment to maintaining its industry leadership by investing in innovation and athlete-focused brands, despite the current market challenges. After the announcements, Nike’s shares dropped about 3% in after-hours trading, reflecting investor concerns amid ongoing geopolitical tensions, inflationary pressures, and Nike’s overall stock decline of more than 40% this year.