What Happened: Shares of Nike (NKE) fell as much as 6% in after-hours trading Thursday after releasing its fiscal first-quarter results and announcing operational changes, which will include layoffs. What’s behind the move: Nike posted fiscal first-quarter revenue of $11.21 billion, compared to consensus estimates of $11.33 billion. That represented a 4% decrease from the prior-year period. Earnings per share were $0.48, down from $0.49 a year ago. The company said revenue is expected to decline by high single digits in fiscal 2027. However, Nike’s gross margin expanded 60 basis points to 42.8%. The company also announced operational changes to reduce costs and operate more efficiently. “This job will result in fewer roles at Nike, and I want to acknowledge that news like this creates uncertainty. I do not take this lightly,” CEO Elliott Hill wrote in a letter to employees. Decisions on affected roles will begin in calendar year 2027 and beyond. 35.15 -0.25 (-0.71%) Close: October 1 at 4:00:02 pm EDT The results come nearly two years after Hill took the helm as CEO. “This is the quarter you would expect from a new CEO in three or four quarters, but not two years,” CFRA analyst Zach Warring, who has a Buy on the stock, told Yahoo Finance. The analyst noted that “valuations and expectations have been reset.” “Now they can move forward and start to get back to growth, expand margins and start to really work in some of the geographies where they are slow, which is obviously China and Europe,” he added. Read more: Caitlin Clark’s new signature Nike shoe almost sold out within two hours of going on sale. What else you need to know: The company was already facing challenges when Hill took over. Nike had pulled out of several major retail partners as it sought to prioritize its own sales channels, giving competitors an opportunity to gain ground. The change has not been easy. “We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we are taking deliberate steps to strengthen those businesses the right way for the long term,” Hill said in the company’s earnings release. In late August, Dick’s Sporting Goods (DKS) issued a brutal warning about its business, in part because Nike is heavily discounting slow-moving products. Soccer icon Kylian Mbappé ended his long-term business relationship with Nike last month and announced that he will now join Swiss sports giant On (ONON). Nike stock recently fell from the S&P 100 (^SP100) after nearly 20 years on the index. Thursday’s report is the first earnings release under new CFO Dave Denton, who previously held a position at Pfizer. Inés Ferré is a senior business reporter at Yahoo Finance. Click here for an in-depth analysis of the latest stock market news and events influencing stock prices. Read the latest financial and business news from Yahoo Finance.
