Nike's Stock Hits 13-Year Low as Layoffs and Revenue Decline Mount

A Stumbling Giant Keeps Falling

For much of this calendar year, Nike stock has been trading at 13-year lows as the company struggles to fight its competition and maintain a consumer base. That painful slide deepened on Friday, October 2, when shares dropped sharply for a second consecutive day following a grim quarterly earnings report. Nike fell for a second straight day after the company reported declining revenue and plans to lay off staff in 2027.

Nike shares fell about 9% in extended trading on Thursday. The company reported a mixed Q1, and investors were worried about the outlook. Even a modest earnings beat couldn't soften the blow. A weak revenue outlook added further weight, while investors brushed off the retailer's modest earnings beat of 48 cents per share.

The Numbers Behind the Slide

The sportswear giant said its fiscal first-quarter revenues were down 4% to $11.2 billion, citing declines in Greater China, which was partially offset by growth in its North America segment. Net income was $712 million, down 2% from $727 million the previous year. Wall Street had expected more — Nike's quarterly revenue came in at $11.21 billion, missing the $11.32 billion consensus.

China was the biggest problem. Revenue there dropped 26%. Nike Sportswear, which made up just under half of total revenue, fell by a low-double-digit percentage. North America was a bright spot, with revenue of $5.13 billion, just above estimates. But one strong region simply wasn't enough. CEO Elliott Hill said the strong performance in the business is "not yet large enough" to offset weakness in Sportswear, Jordan Brand and Greater China.

More Layoffs and a $2.5 Billion Overhaul

Alongside its earnings, Nike unveiled an expanded restructuring program called Pace to generate approximately $2.5 billion in cumulative savings through fiscal 2031. The plan includes modernizing Nike's global supply chain, opening a new campus in India, reorganizing operations into three geographic regions and further reducing costs through organizational streamlining — and that streamlining will include layoffs.

The restructuring will lead to layoffs starting in 2027, and Nike did not say how many jobs will go. This is the third round of layoffs the company has announced this year. Nike also unveiled Pace at a cost of $1 billion in pre-tax charges, mostly employee-related. For workers at one of the world's most recognizable brands, the uncertainty is real — CEO Elliott Hill acknowledged as much in a letter to employees, writing "This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty."

A Turnaround That Keeps Getting Harder

Chief executive Elliott Hill has spent nearly two years rebuilding Nike around sport, innovation and stronger wholesale relationships. But the results keep disappointing. Nike expects revenues to decline in the high-single digits in 2027, and its shares have declined nearly 45% since the beginning of the year. Analysts are losing patience — Citi analysts said in a note on Friday, "Nike is turning into a cost-cutting story."

Notably, the pain appears to be Nike's alone to bear. Nike is taking a company-specific hit to its turnaround story, while the rest of athletic apparel holds largely steady. Rivals like Lululemon and On Holding barely flinched on the same trading day, raising a pointed question: is Nike facing a problem unique to itself, or is it simply the first major brand to feel a deeper industry shift? With another year of projected revenue declines ahead and a third wave of layoffs on the horizon, investors and employees alike will be watching closely to see whether the Pace restructuring plan can finally turn the tide — or whether the swoosh keeps fading.