Nike Reports Revenue Decline and Unveils Cost-Cutting Pace Plan

Nike, Inc. (NYSE: NKE) reported its fiscal 2027 first quarter results on October 1, 2026, revealing a 4% decline in revenue to $11.2 billion. The drop was steeper on a currency-neutral basis, at 5%. The company also introduced a new operational model called Pace, aimed at achieving approximately $2.5 billion in cost savings by fiscal 2031.

The revenue decline was driven by a 22% drop in Greater China and a 5% decrease in EMEA, partially offset by a 2% growth in North America. NIKE Brand revenue fell 4% to $11.0 billion, while Converse revenue plummeted 28% to $263 million. Despite the revenue downturn, gross margin expanded by 60 basis points to 42.8%, thanks to lower warehousing and logistics costs.

Nike's net income decreased by 2% to $712 million, with diluted earnings per share at $0.48. The company returned $610 million to shareholders through dividends, up 3% from the prior year. CEO Elliott Hill emphasized that the Pace program is designed to accelerate momentum across Nike's performance business, particularly in areas like NIKE Sportswear, Jordan Brand, and Greater China.

Looking ahead, Nike expects fiscal 2027 revenue to decline by a high-single-digit percentage. The company anticipates approximately $1 billion in pre-tax charges through fiscal 2031, primarily employee-related costs, in addition to $300 million in severance costs recognized in fiscal 2026. The effective tax rate for the year is projected to be in the mid-20% range.