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Nike’s latest earnings offered investors a split picture: the sportswear company exceeded Wall Street’s profit expectations for its fiscal first quarter, but revenue fell and management forecast a deeper sales decline for the full year. The results, released October 1, 2026, also showed Greater China sales dropping sharply as Nike announced more job cuts and a restructuring of its regional operations.
The numbers put the limits of Nike chief executive Elliott Hill’s turnaround effort back in focus. Gross margin improved and some performance categories grew, but those gains have not yet translated into broad revenue recovery. Reuters reported that Nike shares fell about 8% in early trading Friday, October 2, as investors assessed the outlook and the extended timeline for the restructuring’s expected savings.
Profit and margin gains contrast with weaker sales
For the quarter ended August 31, Nike reported revenue of about $11.2 billion, down 4% from a year earlier on a reported basis and 5% on a currency-neutral basis. Revenue came in below analyst expectations cited in contemporaneous reporting. Diluted earnings per share were 48 cents, while net income declined 2% to about $0.7 billion.
Gross margin rose 60 basis points to 42.8%. Nike’s earnings release attributed the improvement primarily to lower warehousing and logistics costs. The margin result and profit beat did not offset the concern raised by falling sales and the company’s weaker full-year forecast.
Performance varied across the business. Nike said North America returned to growth, rising 2%, and identified running, football, training and basketball as growing performance categories. By contrast, Greater China revenue fell 26% on a currency-neutral basis, a deterioration that Reuters said Hill expects will take multiple seasons to address.
Full-year forecast points to a longer reset
Nike said it expects fiscal 2027 revenue to decline in the high-single-digit range. It forecast adjusted diluted earnings per share of $1.15 to $1.35, excluding about 15 cents per share of restructuring costs related to its Pace program. Those projections underline that management expects pressure to persist beyond the reported quarter.
The company has identified sportswear, Jordan Brand and Greater China as areas requiring further work. Reuters reported that the three areas together account for more than half of Nike’s sales. The company has been trying to refocus product development on sport and rebuild wholesale relationships after an earlier strategy prioritized direct sales and a narrower selection of lifestyle products.
Nike Direct revenue also weakened, falling 9% in the quarter, according to the company’s results. The performance matters because a decline in the direct channel can offset growth elsewhere, making a recovery in wholesale or selected product categories insufficient on its own to establish a company-wide sales rebound.
Restructuring savings are not immediate
Nike announced additional job cuts and a move from four operating regions to three: the Americas; Asia Pacific and Greater China; and Europe, the Middle East and Africa. Reuters reported that the reorganization is part of the company’s effort to simplify operations as it addresses weak demand and ongoing challenges in China.
The Pace program is expected to generate approximately $2.5 billion in cumulative savings through fiscal 2031, Nike said. The company also expects about $1 billion in pretax charges through that period, primarily related to employee costs, on top of approximately $300 million in severance costs recognized in fiscal 2026. Reuters said most of the savings are expected in fiscal 2029 and 2030, meaning the cost program is not a near-term substitute for stronger sales.
Reuters quoted GlobalData managing director Neil Saunders as saying that cost reductions may support margins and give the company time, but do not resolve the brand issues behind declining demand. That distinction is central to the results: Nike can reduce expenses and improve selected efficiency measures, while still needing evidence that its product and market strategy is bringing customers back.
Investor day and next earnings offer checkpoints
Nike’s investor day is scheduled for November 16 and 17. Reuters reported that analysts are looking for a clearer roadmap to restore growth and profitability. The company has not yet demonstrated that its China stabilization effort or product reset has reversed the broader sales trend.
The next quarterly report is expected in December, with Investing.com listing December 17 as a tentative date. That report will offer another look at revenue, regional performance and margins, but Nike’s own guidance indicates the fiscal year remains challenging. The precise timing and content of future product launches and any leadership updates remain separate questions; the near-term test is whether operating improvements are accompanied by measurable improvement in demand.
For now, the first-quarter release confirmed progress in gross margin and isolated parts of the performance business, alongside a sales shortfall and a sharp China decline. Nike’s coming investor day will provide management’s next scheduled opportunity to explain how the restructuring, regional changes and product strategy fit together, while the full-year forecast indicates that a broad recovery has not yet arrived.
