Nike Stock Takes Hit Amid Restructuring Efforts and Revenue Warning
Nike's stock fell 4% in after-hours trading on Thursday after the company announced a restructuring plan that will lead to layoffs starting in 2027. The sportswear giant also warned of a high-single-digit revenue decline for fiscal 2027.
The company reported first-quarter revenue of $11.21 billion, missing analysts' expectations of $11.32 billion. However, Nike beat earnings per share estimates with 48 cents compared to the expected 43 cents.
Nike's net income was $712 million, down from $727 million a year earlier, while revenue declined by 4%. The company's gross margin rose to 42.8%, exceeding analysts' expectations of 42.4%.
The restructuring plan includes modernizing Nike's supply chain and reorganizing the business into three geographies. This is expected to generate approximately $2.5 billion in savings through fiscal 2031, but will also result in a 15-cent expense per share for fiscal 2027.