Nike shares tumble 6% on dismal revenue forecast, layoff plans as sneaker giant loses shine

Nike shares tumbled 6.7% Friday after the sportswear giant shared a dismal revenue forecast and warned of upcoming layoffs, as athletes flock to rival sneaker brands.It was the second straight day of declines for Nike, putting the sneaker brand’s stock down more than 48% so far this year. On Thursday, Nike reported that its first-quarter revenues slumped 4% to $11.2 billion, citing declines in Greater China – partially offset by gains in North America – and challenges in its Sportswear and Jordan brands.Net income was $712 million, down 2% from $727 million the previous year.It expects revenue to fall by high-single digits in fiscal year 2027 and unveiled a new operating model called “Pace” designed to cut costs – which will lead to more layoffs next year.“This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty.I don’t take that lightly,” Elliott Hill, president and CEO of Nike, wrote in a note to employees Thursday.“Throughout this process, we will communicate directly, act with transparency and treat people with respect.

Decisions about impacted roles related to this work will begin in calendar year 2027 and beyond.”When Nike introduced its first Air Jordans in 1985, it expected to sell about 100,000 pairs in the first year.Instead, it sold 4 million and the infamous partnership with basketball Hall of Famer Michael Jordan turned Nike into the brand to beat for decades.But the company has steadily been losing its appeal.

A few weeks ago, Madrid striker Kylian Mbappé ended his two-decade partnership with Nike, leaving for rival sneaker brand On.Global soccer stars Lamine Yamal, Harry Kane and Ousmane Dembélé have also cut ties with Nike.Hill addressed these challenges in a statement, saying: “We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we’re taking deliberate actions to strengthen those businesses the right way for the long-term.”The ne...