Nike stock fell 5% in early Friday trading after quarterly revenue missed expectations and the company announced planned layoffs. The sportswear maker said operational changes would reduce costs and improve efficiency.

Fiscal first quarter revenue totaled $11.21 billion, below consensus estimates of $11.33 billion. That represented a 4% decline from the year-earlier period, according to Yahoo Finance’s earnings report.

Nike Expects Fewer Roles Across The Company

CEO Elliott Hill acknowledged the effect of the announcement in a letter to employees. Decisions about impacted roles will begin in calendar year 2027 and beyond.

Nike footwear displayed inside a retail store
Nike footwear displayed inside a retail store.

“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,” Hill wrote.

The company did not present those role decisions as already completed. Its operational changes are intended to lower costs while allowing the business to operate more efficiently.

Nike also expects revenues to decline in the high single digits in fiscal 2027. Hill suggested weakness in the sportswear market would continue in the medium term.

That weakness is leading Nike to discount slow-moving products. Yahoo Finance reported that the discounting could pressure other companies in the sector to follow.

Analyst Questions The Pace Of Nike’s Turnaround

The results arrived nearly two years after Hill took the CEO role. CFRA analyst Zach Warring questioned the timing of the company’s progress while maintaining a Buy on the stock.

“This is a quarter you’d expect from a new CEO three or four quarters in, but not two years in,” Warring told Yahoo Finance.

Warring said valuations and expectations had been reset. The analyst described a potential path toward growth and stronger margins, rather than reporting those improvements as achieved.

“Now they can kind of move forward and begin to return to growth, expand margins, and start to really work on some of the geographies that they’re sluggish, which is obviously greater China and Europe,” Warring said.

Other earnings coverage examines Salesforce’s growth and stock performance. Related market reporting also covers BlackBerry shares before earnings and SpaceX’s revenue expectations.

Retail Relationships And Regional Businesses Remain Challenges

Nike was already facing difficulties when Hill took over. The company had reduced its relationships with several major retail partners while prioritizing its own sales channels.

That decision gave competitors an opening to gain ground. Hill’s earnings statement identified several businesses where the company still needs to make progress.

“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,” Hill said.

Shares of On, Under Armour and Hoka maker Deckers Outdoor also dropped. In late August, Dick’s Sporting Goods warned about its business, partly because Nike was discounting slow-moving products heavily.

Soccer player Kylian Mbappé ended his long-term business relationship with Nike last month and announced plans to join On. Nike’s next decisions on affected jobs are expected to begin in calendar year 2027 and beyond.