Nike Stock Hits 13-Year Low as Q1 Revenue Misses, Layoffs Loom

Nike shares fell nearly 9% on October 2 to $32, their lowest price since 2013, after the company reported fiscal Q1 revenue of $11.21 billion, missing the $11.32 billion consensus and declining 4% year-over-year. CEO Elliott Hill announced a major restructuring called Pace targeting $2.5 billion in cost savings by 2031, with layoffs beginning in 2027. The weak results and grim outlook signal management’s struggle to stabilize the sportswear giant.

Q1 Revenue Miss and Weak Guidance

Nike’s fiscal Q1 revenue came in at $11.21 billion, falling short of the $11.32 billion analyst consensus and down 4% year-over-year. The company reported diluted earnings of $0.48 per share, beating the 43-44 cent consensus. However, the earnings beat was overshadowed by weak sales and a deteriorating outlook. Nike now forecasts a high-single-digit revenue decline for fiscal 2027, well below market expectations. Greater China sales crashed 26% on a constant-currency basis, marking nine consecutive quarters of declines. Nike Sportswear, which accounted for just under half of quarterly revenue, fell low double digits, with the company intentionally reducing Dunk revenue by nearly 50%, creating a $200 million headwind.

Pace Restructuring and Job Cuts

Nike announced the Pace operating model, which will deliver $2.5 billion in cost savings by fiscal 2031 but carry $1 billion in restructuring charges, mostly from layoffs. CEO Elliott Hill stated that decisions about affected roles will begin in calendar year 2027 and beyond, without specifying the number of positions. The company will reorganize from four geographic divisions to three: the Americas, Asia Pacific and Greater China, and EMEA. The plan also includes supply-chain modernization and a new India campus. Nike has already cut 775 jobs across U.S. distribution centers in January and 1,400 employees primarily in tech in April.

Analyst Downgrades and Market Reaction

Wall Street firms slashed price targets following the earnings report. Wells Fargo lowered its target to $30 from $40, citing headwinds across Jordan, Sportswear, and China. Citi cut its target to $32 and described Nike as turning into a cost-cutting story, saying the stock does not warrant a premium multiple relative to peers. Bank of America maintained an Underperform rating and lowered its price target to $24 from $30, cutting fiscal 2027 and 2028 EPS estimates by 21% and 22% respectively. Goldman Sachs lowered its target to $30 from $38. Citi maintained a Neutral rating while most peers signaled limited visibility on a sales turnaround.

Broader Sector Impact and Stock Decline

Nike’s selloff extended a year-to-date decline of 45% and a five-year drop of 77%. Shares of rival athletic brands including Lululemon, On Holding, Under Armour, and Deckers Outdoor all fell in premarket trading, though the damage remained concentrated in Nike. The Consumer Discretionary Select Sector SPDR ETF held flat, and the S&P 500 rose 1%, showing the weakness is company-specific. Meyka grades NKE as B+ with a Buy suggestion, but the stock trades at 16.2x trailing earnings with an RSI of 27.92, indicating oversold conditions. Analyst consensus remains mixed at 3.0 (neutral), with 11 Buy, 17 Hold, and 8 Sell ratings.

Final Thoughts

Nike’s stock collapse reflects a loss of confidence in the pace of its turnaround, not merely a weak quarter. With Greater China in freefall and Sportswear struggling, the company’s path to recovery remains unclear despite aggressive cost-cutting. Investors face a choice between betting on the restructuring or waiting for clearer signs of stabilization.

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