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Nike stock falls 10% after revenue falls and layoff plans underway
CNBC • • business
Key Points:
- Nike's shares fell for a second consecutive day after reporting a 4% decline in fiscal first-quarter revenue to $11.2 billion, with net income dropping 2% to $712 million, primarily due to challenges in Greater China.
- The company announced a new operating model called "Pace," aimed at achieving $2.5 billion in cost savings by 2031, which includes plans for further staff layoffs starting in 2027.
- Nike expects its revenues to decline in the high-single digits in 2027, contributing to a nearly 45% drop in its stock price since the start of the year.
- The "Pace" program involves modernizing Nike's global supply chain, reorganizing into three geographic regions, establishing a new campus in India, and streamlining operations to reduce costs.
- Analysts from Citi remain neutral on Nike, noting the company's shift toward cost-cutting amid pressure in key segments and cautioning that the full impact of the "Pace" program won't be clear until 2029.
