Shares of Nike Inc. are tumbling to fresh lows Friday morning following disappointing first-quarter results and layoff plans.
The athletics company reported $11.21 billion in revenue, down 4% year-over-year (YOY).
Its revenue failed to meet Wall Street’s expectation of $11.32 billion, according to consensus estimates cited by CNBC. Nike did beat the predicted 43 cents earnings per share, reaching 48 cents earnings per share.
As of this writing, Nike stock (NYSE: NKE) was down more than 8% in premarket trading. Shares have tumbled more than 52% over the last 12 months as of Thursday’s close.
“Changes to operating model” on the horizon
Looming potentially greater than Nike’s first fiscal 2027 earnings report was its announcement of a new operating model. The plan includes an ominous warning that Nike will be cutting jobs at the company, though it doesn’t say how many or exactly when.
In the announcement, president and CEO Elliott Hill said decisions would start in the calendar year 2027 and that he doesn’t “yet know the number of roles or specific locations of positions.”
“The future will belong to companies that can move faster, serve athletes and consumers more locally, and invest more aggressively in innovation,” Hill stated. “To do that, Nike must make changes to become a more agile, efficient and athlete-focused company.”
“This work will result in fewer roles across Nike,” he added, “and I want to acknowledge that news like this creates uncertainty.”
Nike has already had significant layoffs this year, with the company confirming roughly 775 U.S. job cuts in January.
The new operating model also includes splitting its customers into three geographic areas: Americas, APGC (Asia Pacific and Greater China), and EMEA (Europe, the Middle East, and Africa). There will be a new Nike campus in Bengaluru, India.
The plan further involves “supply chain modernization,” a process the company started over a year ago, one that is showing “considerable progress.”
Nike shares are trading near a 13-year low
Nike’s stock price is currently among the bottom 10 performers for the S&P 500. Last month, the footwear giant was booted from the S&P 100.
