Is Nike struggling? Weak sales, layoffs raise questions for 'Just Do It' brand

Nike posted weaker quarterly sales and unveiled another cost-cutting plan with job cuts. The results sharpen concerns over its turnaround as China, digital and Jordan remain under pressure.

In Short

• Nike’s Q1 fiscal 2027 revenue down 4%, outlook weak
• New Pace programme aims $2.5 billion savings, more job cuts
• Nike sales fall sharply in Greater China, digital and Nike Direct

Nike’s latest earnings have raised fresh questions about the sportswear giant’s recovery, with sales falling, its outlook remaining weak and the company announcing another round of cost-cutting measures that include further job cuts.

Nike reported first-quarter fiscal 2027 revenue of $11.2 billion, down 4% from a year earlier and 5% on a currency-neutral basis. Nike Brand revenue also fell 4%, while Nike Direct revenue declined 8%. The company expects revenue to fall by a high-single-digit percentage in fiscal 2027.

Nike also announced a new operating model transformation called Pace, which it expects to generate about $2.5 billion in cumulative savings through fiscal 2031. The plan includes employee-related costs and further restructuring, with Nike expecting about $300 million in additional severance costs in fiscal 2027.

For a company that made its “Just Do It” slogan part of popular culture and turned its swoosh into one of the world's most recognisable logos, the latest numbers point to a period of major change.

The question now is whether Nike could be losing some of the dominance it built over decades.

NIKE IS CUTTING COSTS, AGAIN

The latest restructuring builds on the cost-cutting measures Nike has already taken as CEO Elliott Hill tries to turn around the business.

Nike expects the Pace programme to generate around $2.5 billion in savings through fiscal 2031. But the savings will come with costs: the company expects about $1 billion in pre-tax charges through fiscal 2031, mainly related to employee costs, in addition to around $300 million in severance costs already recognised in fiscal 2026. It expects another $300 million in charges in fiscal 2027.

The company has not specified a total number of jobs that will be cut under the latest programme.

Nike says the changes are aimed at improving productivity, simplifying the organisation and allowing it to put more resources behind its sports-focused strategy. Hill said the company still has “more work to do” in Nike Sportswear, Jordan Brand and Greater China.

But the repeated restructuring comes at a time when its core business is already under pressure.

NIKE SALES ARE FALLING

Nike’s latest quarter showed weakness across several parts of the business.

Nike Direct revenue fell 8%, while digital sales declined 13%. Sales through Nike-owned stores dropped 5%. Converse, another brand owned by Nike, saw revenue plunge 28%.

Greater China was one of the weakest markets, with revenue falling 22% on a reported basis and 26% on a currency-neutral basis.

Nike Brand footwear revenue also fell 6% in the quarter, an important number for a company whose shoes remain at the centre of its business.

There were some positives. Gross margin improved by 60 basis points to 42.8%, selling and administrative expenses fell 3% and North America recorded growth.

But the broader outlook remains weak. Nike expects fiscal 2027 revenue to decline by a high-single-digit percentage.

NIKE STOCK HAS HAD A BRUTAL YEAR

Nike’s struggles are also visible in its stock price.

Shares closed at $35.15 on October 1, down 0.7% for the day, before falling another 8.7% in after-hours trading to around $32.09 following the earnings report.

Nike ended 2025 at $63.71. That means the stock was down about 45% by the October 1 close. At the after-hours price of around $32.09, the decline from the end-2025 level was close to 50%.

The stock also touched $35.02 during Thursday’s trading session, its 52-week low based on market data available after the results. Its 52-week high was around $77.

Several factors have weighed on Nike, including weak sales in Greater China, pressure on its digital business, excess inventory and a turnaround that has taken longer than expected. Tariffs affecting its globally spread manufacturing supply chain have also added to cost pressures.

The latest results added to those concerns, with revenue of $11.2 billion falling short of market expectations of about $11.3 billion, while the company’s fiscal 2027 outlook was weaker than expected. Reuters reported on the results and the pressures facing Nike, including China and competition.

NIKE'S S&P 100 EXIT

Nike was also removed from the S&P 100 in September after nearly 18 years in the index.

The move does not affect Nike’s operations, and the company remains part of the broader S&P 500. But it comes after a sharp decline in its market value and adds another visible marker to the company’s difficult run in the stock market.

At the same time, Nike is trying to rebuild its business rather than simply cut costs.

Its latest strategy puts more emphasis on performance sports and aims to reduce its dependence on older lifestyle products and franchises.

THE JORDAN PROBLEM

One of Nike’s biggest challenges is playing out within a brand that once seemed almost impossible to slow down: Jordan.

Nike said Jordan Brand revenue fell by a mid-teens percentage in the latest quarter. The company has also acknowledged that it had been oversupplying some of its iconic retro products.

It now plans to reduce the volume and frequency of certain Jordan retro launches, including the Air Jordan 1, as it tries to restore more scarcity around the products.

The change is notable because Nike has spent years turning classic sneakers into repeat launches and major sales drivers.

The company is now trying to make its product portfolio more focused while reducing what Hill has described as a “sea of sameness” in the lifestyle business.

NIKE IS FACING MORE COMPETITION

Nike’s reset comes as consumers have more choices in sportswear.

For years, Nike’s biggest traditional rivals included Adidas and Puma. But newer brands such as On and Hoka have built strong positions, particularly in running.

On has also started moving into sports beyond running and tennis.

One of its biggest recent moves was signing French football star Kylian Mbappe after he ended his two-decade partnership with Nike. Reuters reported that Mbappe had signed with On as the Swiss sportswear company prepares to enter football, with its first football boots planned for 2027.

Mbappe’s departure does not by itself change Nike’s business. But it is another example of the changing competitive landscape around the brand.

Nike has also recently lost Spain’s Lamine Yamal to Adidas, according to Reuters, adding to the pressure on its position in football.

CHINA REMAINS A MAJOR CHALLENGE

Greater China is another major part of Nike’s problem.

Revenue in the region fell 26% on a currency-neutral basis in the latest quarter. Reuters reported that Nike has faced prolonged weakness in China as it competes with both international and local brands.

The weakness matters because China has historically been an important international market for Nike.

The company is now changing how it operates digitally in the region as part of a broader effort to make its products more relevant to Chinese consumers and improve the way they are sold.

So even in one of its most important markets, Nike is having to rethink parts of its strategy.

FROM DREAM SHOES TO A TOUGHER MARKET

For a generation of consumers, Nike shoes were more than just sportswear.

Growing up, owning a pair of Nike shoes could feel like a milestone. The swoosh was everywhere, on basketball courts, football pitches, television screens and on the feet of athletes many children wanted to emulate.

Michael Jordan helped turn Nike shoes into cultural icons. Later, athletes such as Cristiano Ronaldo, LeBron James and Mbappe became part of a global marketing machine that connected the brand with sport and aspiration.

That cultural pull helped Nike become much more than a footwear company.

But the sportswear market has changed.

Consumers now have more brands to choose from, while newer companies have built their identities around specific categories such as running. Nike is therefore trying to balance the strength of its established franchises with the need to create products that can generate fresh demand.

SO, COULD NIKE BE LOSING ITS DOMINANCE?

Nike is not suddenly disappearing from the sportswear market.

It remains a global giant, generating more than $11 billion in revenue in a single quarter, with a huge athlete portfolio, a global retail network and one of the most recognisable brands in the world.

But several pieces of the business are moving in the wrong direction at the same time.

Sales are falling. Greater China remains weak. Nike Direct and digital sales have declined. Jordan is being reset. The company is cutting costs and jobs. Its stock has fallen sharply this year. And newer sportswear brands are taking up more space in categories where Nike once had a much stronger position.

For people who grew up seeing Nike shoes as the ultimate sportswear aspiration, the change is hard to miss.

The swoosh is still there. The “Just Do It” slogan is still there. The athletes are still there.

But Nike now has to prove that the brand can turn its enormous legacy into fresh growth.

- Ends