DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Nike shares fell as much as 6% in after hours trading Thursday after the athletic apparel company missed Wall Street revenue estimates and announced operational changes that will include layoffs. The disappointing report covered Nike’s fiscal first quarter.

Revenue totaled $11.21 billion, below consensus estimates of $11.33 billion. Sales declined 4% from the same period a year earlier, adding pressure to a company already working through challenges across key brands and markets.

Earnings per share reached $0.48, slipping from $0.49 a year ago. The modest decline in earnings accompanied a revenue miss that quickly drew a negative response from investors.

Nike also warned that revenue is expected to decline in the high single digits during fiscal 2027. That outlook placed more attention on the company’s effort to cut costs and improve operating efficiency.

One brighter figure emerged in profitability. Nike’s gross margin expanded by 60 basis points to 42.8%, even as the company reported lower revenue and prepared investors for another difficult fiscal year.

The planned operational changes will mean fewer jobs across Nike, though the company did not specify how many roles would be eliminated. Decisions concerning affected positions will begin in calendar year 2027 and continue beyond that point.

"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," CEO Elliott Hill wrote in a letter to employees.

The quarter arrived nearly two years after Hill became CEO. That timeline drew a sharp response from CFRA analyst Zach Warring, who maintains a Buy rating on Nike shares despite his criticism of the results.

"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. His assessment reflected concern about how far Nike remains from a sustained return to growth.

The analyst also said, "Valuations and expectations have been reset." He added that the company can now move forward, work toward growth and margin expansion, and address sluggish performance in Greater China and Europe.

Nike was already contending with business challenges when Hill took control. The company had retreated from several major retail partners while prioritizing its own sales channels, creating room for competitors to gain ground.

Hill acknowledged that the repair effort remains unfinished. "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," he said in the earnings release.

Additional warning signs have emerged around Nike’s merchandise and commercial relationships. In late August, Dick’s Sporting Goods delivered a brutal warning about its business, partly because Nike was heavily discounting slow moving products.

Soccer icon Kylian Mbappé also ended his long term business relationship with Nike last month. He announced that he would join Swiss sports company On, marking another setback for Nike as it works to strengthen its major businesses.

Nike recently lost its place in the S&P 100 after nearly 20 years in the index. Thursday’s report was also the first earnings release under new CFO Dave Denton, who previously held a position at Pfizer.

The combination of weaker revenue, a projected fiscal 2027 decline and coming job reductions left investors with a difficult outlook to digest. Margin improvement offered some support, but the immediate market verdict sent Nike shares sharply lower after the results.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.