Nike issues bleak forecast, plans to slash more jobs after sales disappoint

Nike deepened its restructuring under CEO Elliott Hill on Thursday, announcing a plan to cut more jobs and shake up its global business divisions after the struggling sportswear giant projected a surprisingly steep drop in full-year revenue.The company has been working to revive growth during the first two years of Hill’s tenure by refocusing on key sports such as running and by rebuilding relationships with wholesale retailers.But the weaker-than-expected forecast underscored that Nike’s challenges will likely persistent for at least several more quarters — especially in China, where sales tumbled 26% on a constant-currency basis in the first quarter — adding to investor unease about the pace of Hill’s turnaround.Nike’s woes have in large part stemmed from a failure to release enough new, compelling products, analysts have said, leading to an uptick in promotions and discounts.Its shares fell 4% in extended trading.The company, which also missed analysts’ expectations for first-quarter revenue, unveiled changes to its operating model, including job cuts and a move to three geographic regions — Americas, Asia Pacific and Greater China, and EMEA — instead of four.

It plans to open a new campus in India “with strong capabilities and access to talent.”Nike said the company does not yet know the number or roles that will be cut under the restructuring.Its will begin notifying employees in 2027.The program, building on its previously announced restructuring push, which also included job cuts, is expected to deliver about $2.5 billion in savings through fiscal 2031.Nike expects its revenue to decline in high-single digits in fiscal 2027.

The company earlier forecast revenue to decline by a low-to-mid-single-digit percentage in the first half of fiscal 2027.China, historically a profit-driver for Nike, has shown particular weakness in recent quarters as international rivals and domestic sportswear groups gain traction, fueling investor concerns abou...