Nike Cuts Revenue Outlook and Launches Pace Overhaul

Nike reported fiscal first-quarter earnings of $0.48 per share, beating analyst estimates of $0.44, though revenue of $11.21 billion missed forecasts. Despite the earnings beat, net income fell 2% to $712 million, and the company warned that revenue for fiscal 2027 is expected to decline by a high-single-digit percentage.

Performance in Greater China remains a primary weakness, with revenue dropping 22% to $1.18 billion. To address brand perception issues and pricing inconsistency in the region, Nike will cut ties with thousands of online distributors in China starting in January. In contrast, North American revenue rose 2% to $5.13 billion, and overall inventory levels fell to $7.8 billion.

To revitalize growth, the company announced Pace, a new operating model overhaul focused on supply chain modernization and a reorganization into three geographies. The program includes the establishment of a new campus in India and is projected to generate $2.5 billion in savings by fiscal 2031, though it will lead to workforce reductions starting in 2027.

Nike is also shifting its product strategy toward athlete-led performance gear, highlighted by the global launch of the Caitlin 1 signature shoe for WNBA star Caitlin Clark. This comes as the company faces increased competition from brands like On, Hoka, and New Balance, and recently lost athlete Kylian Mbappé to On.