Nike quarterly sales miss estimates as China weakness, competition weigh

Nike's quarterly sales missed estimates, with China's weakening economy and heightened competition contributing to the decline. The sportswear giant announced a plan to cut more jobs and restructure its global business divisions as its full-year revenue projection fell short. Nike's woes in China intensified, with sales dropping 26% in the first quarter on a constant-currency basis.

CEO Elliott Hill acknowledged that the company's challenges would likely persist for several more quarters, particularly in China, where sales have declined for nine consecutive quarters. The company's restructuring efforts aim to revive growth in key sports and rebuild relationships with wholesale retailers, but analysts say the company's struggles stem from a lack of compelling new products.

Nike's revenue in the first quarter fell about 4% to $11.21 billion, missing analysts' average estimate of $11.32 billion, while its gross margin rose 60 basis points to 42.8%. As part of its restructuring plan, Nike will reduce its workforce and transition to three geographic regions: Americas, Asia Pacific, and Greater China, and EMEA.

However, the company has not disclosed the exact number of roles to be cut and expects to begin notifying employees in 2027. The restructuring is projected to generate around $2.5 billion in savings through fiscal 2031, with the majority realized in fiscal years 2029 and 2030.