Shares of Nike Inc. dipped over 3 percent after the market close Thursday following the company’s sales miss in the first quarter.
Net income at the Beaverton, Ore.-based company in the first quarter of fiscal 2027 was $712 million, down 2 percent from $727 million at the same time last year. Diluted earnings per share in the first quarter were 48 cents, down from 49 cents a share in the first quarter of 2026.
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Net sales in the quarter tallied $11.2 billion, down 4 percent from $11.7 billion in the first quarter last year on a reported basis, and down 5 percent on a currency-neutral basis.
The company’s first-quarter sales results fell short of Wall Street’s best guess. Analysts, on average, were expecting net sales of $11.32 billion and EPS of 43 cents, according to LSEG.
By business segment, the company said Nike brand’s first-quarter revenues were $11 billion, down 4 percent on a reported and currency-neutral basis, primarily due to declines in Greater China and Europe, the Middle East and Africa, partially offset by growth in North America.
Wholesale revenues in the first quarter were $6.8 billion, down 1 percent on a reported and currency-neutral basis, primarily due to declines in Greater China, partially offset by growth in North America.
Nike Direct revenues were $4.1 billion, down 8 percent on a reported basis and down 9 percent on a currency-neutral basis, due to a 13 percent decrease in Nike Brand Digital and a 5 percent decrease in Nike-owned stores.
Revenues for Converse in the first quarter were $263 million, down 28 percent on a reported and currency-neutral basis, due to declines across all territories.
What’s more, Nike also disclosed a new operating model transformation to “scale the success” of the Sport Offense strategy.
Called Pace, the program includes and builds upon the previous cost realignment plan announced in March 2026. Pace includes efforts to modernize Nike’s global supply chain, the establishment of a new campus in India to fuel its enterprise capabilities, a realignment to three geographies, and further streamlining of the organization to reduce costs.
Nike said that it expects Pace to deliver approximately $2.5 billion in cumulative savings through fiscal 2031, with approximately $1 billion of pretax charges, primarily consisting of employee-related costs, through fiscal 2031, in addition to about $300 million of severance costs recognized in fiscal 2026. Nike expects $300 million to be recognized in fiscal 2027. Confirmation on a new round of layoffs was not provided but inferred in the company’s release on Thursday.