Nike Posts a Ninth Straight Drop in China, and Elliott Hill Renames the Turnaround 'Pace'

Nike's turnaround keeps getting a new name, and its latest one is "Pace." The company reported fiscal first-quarter revenue of $11.21 billion on October 1, a 4% year-over-year decline that missed Wall Street's $11.32 billion target, and investors sent Nike shares down as much as 8.5% in after-hours trading. Greater China, the market CEO Elliott Hill has spent two years promising to fix, fell 26% on a currency-neutral basis, its ninth consecutive quarterly decline.

Hill's answer is a restructuring aimed at $2.5 billion in savings through fiscal 2031: Nike is collapsing four geographic divisions into three, moving its Asia Pacific and Greater China leadership to Singapore, modernizing its supply chain, and building a new campus in Bengaluru, India, to develop talent across Nike, Jordan Brand, and Converse. The company expects roughly $1 billion in pre-tax charges, mostly severance, and told employees that "fewer roles across Nike" are coming, with specific cuts decided starting in 2027.

It is the same math problem Nike has been running since Hill took over: shrink the business to grow it later. The company already cut nearly 2,200 jobs earlier this year, and fiscal 2027 guidance now calls for a high single-digit percentage revenue decline, worse than the roughly 2% drop it had projected before. Hill is betting that a smaller, faster Nike beats a bigger, slower one; the ninth straight quarter of China weakness suggests the market is still waiting for proof.

Source: CNBC

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →