Why Is Nike Stock Down? Earnings, Layoffs & China Explained

Why Is Nike Stock Down?

Nike shares are falling because the company warned that revenue will shrink by a high-single-digit percentage this fiscal year, far worse than Wall Street expected. It also announced more layoffs under a multi-year restructuring plan. A better-than-expected profit number wasn’t enough to offset that.

If you opened your brokerage app on Friday, October 2, 2026, and winced, you weren’t alone. Here is what happened, why it matters, and what to watch next.

This article is for information only and is not financial advice.

Why Is Nike Stock Down Today?

Nike reported fiscal first-quarter 2027 results after the market closed on Thursday, October 1. Shares fell about 8.5% in extended trading. By Friday morning, the stock was down about 8% at roughly $32.34 and was already trading near its 52-week low. business-standard247wallst

Three things drove the sell-off:

• A revenue miss. Sales came in slightly below forecasts.
• A much weaker full-year outlook. This was the biggest blow.
• More job cuts. The restructuring adds near-term costs and uncertainty.

Notably, the broader consumer discretionary sector ETF (XLY) was flat that morning. This was a Nike problem, not a market-wide one. 247wallst

What Nike Actually Reported

The quarter ended August 31, 2026. The headline numbers were mixed:

Metric	Result	Expectation
Revenue	$11.21 billion, down 4%	$11.32 billion
Earnings per share	48 cents	43 cents
Gross margin	42.8%, up 60 basis points	42.4%
Net income	$712 million, down 2%	n/a Nike Q1 FY2027 earnings: revenue misses, full-year outlook cut +6

So Nike beat on earnings per share and margin, which is why many people are confused about the drop. Profit improved partly because warehousing and logistics costs fell, not because customers were buying more. Investors usually care more about growth than cost savings, especially for a brand that once commanded a premium valuation. qz

Why Did Nike’s Guidance Hurt More Than the Quarter?

Short answer: Because the forecast implies the recovery is slower and deeper than analysts had priced in.

Nike now expects fiscal 2027 revenue to fall by a high-single-digit percentage, compared with analysts’ previous expectation of roughly a 2% decline. Adjusted EPS guidance of $1.15 to $1.35 also landed below Wall Street’s range. Depending on the source, analysts had expected roughly $1.61 to $1.69. invezz

Management also said about $300 million in charges will hit fiscal 2027, trimming adjusted EPS by about 15 cents. Some of that guidance gap is one-time restructuring cost, but the revenue outlook is the real worry. qz

China: The Biggest Regional Problem

Greater China remains Nike’s weakest market. Sales there tumbled 26% on a constant-currency basis. Other outlets, using reported figures, cited a 22% drop, so the exact number depends on the currency basis. Either way, it’s severe. business-standard

Part of this is deliberate. Nike has been running a marketplace reset since July, cutting unprofitable digital distribution and deep discounting and focusing on fewer flagship storefronts. That protects brand quality over time but hurts sales now. biggo

The bright spot was North America, where revenue rose 2%. fxstreet

What Has Gone Wrong With Nike’s Products?

Short answer: Its performance business is healthy, but the lifestyle businesses that drove its past growth are shrinking.

CEO Elliott Hill described a “tale of two portfolios.” The roughly $16 billion performance business grew high single digits, led by double-digit gains in running, football, tennis and golf. But the rest is weak: biggo

• Nike Sportswear, which makes up just under half of quarterly revenue, fell by a low-double-digit percentage. CNBC
• Jordan Brand declined by a mid-teens percentage. biggo
• Converse fell 28%. fxstreet
• Nike Direct declined 8%, and digital sales fell 13%. fxstreet

Some of this is intentional. For example, Nike cut Dunk revenue by nearly 50% on purpose to reduce oversupply of a once-hot silhouette. Press coverage has also noted that both Nike and retailers like Dick’s and Foot Locker have needed to clear excess casual-shoe inventory. investingsportico

Competition plays a role too. Challenger running brands and rivals such as Adidas and New Balance have gained attention in recent years, particularly in running and retro-style footwear. That’s context rather than a figure from this quarter’s report, but it helps explain why Nike has to win back shelf space and cultural relevance, not just fix costs. Competition plays a role too. Challenger running brands and rivals such as Adidas and New Balance have gained attention in recent years, particularly in running and retro-style footwear. That’s context rather than a figure from this quarter’s report, but it helps explain why Nike has to win back shelf space and cultural relevance, not just fix costs. investing

Nike Layoffs and the “Pace” Restructuring

Short answer: Nike plans to cut roughly $2.5 billion in costs through fiscal 2031, and layoffs are part of it.

The restructuring, called Pace, will bring layoffs starting in 2027. It’s the third round of cuts Nike has announced this year, and the company hasn’t said how many jobs will go. Nike expects about $1 billion in pre-tax charges through fiscal 2031, mostly severance and other employee costs. CNBCcoinpaper

The plan also includes supply chain modernization, a new India campus and a three-region reorganization. biggo

The catch is timing. One analysis noted that most Pace savings arrive in fiscal 2029 and 2030, so investors face costs now and benefits later. 247wallst

Is Nike Stock at a 12-Year Low?

Essentially yes, though outlets round it differently, so you’ll see “12-year” and “13-year” low. Nike traded near its lowest level since early 2014 and sat roughly 80% below its November 2021 record near $179. The stock is also down about 45% for the year, or closer to 48% after Friday’s drop, depending on the measurement date. investinglivesportico

My Take: What the Numbers Suggest

Three observations go beyond the headlines:

1. The market was already pessimistic. Shares were down more than 40% before the report. A further 8-9% drop means the guidance was worse than a bearish baseline.
2. Profit quality matters. A beat driven by lower logistics costs is less convincing than one driven by demand.
3. The timeline is the real issue. Management says pressure in Sportswear, Jordan and China could remain into fiscal 2028. Anyone hoping for a quick rebound has to rethink. 247wallst

Will Nike Stock Recover?

Nobody can promise a recovery, but here are the factors that matter:

• Investor Day in November. Nike has said more detail on Pace and long-term targets is coming. 247wallst
• Performance growth. Can running, football and tennis gains keep offsetting declines elsewhere?
• China’s reset. Does the decline moderate once discounting is cleaned up?
• Sportswear stabilization. Is the shrinking of older franchises nearly done?
• Next quarterly results. Watch whether revenue trends improve before cost savings kick in.

Bulls will point to a strong brand, improving margins and a growing performance business. Bears will point to falling sales, repeated layoffs and a long runway to recovery. Both views have evidence behind them.

• Read More…
• Unemployment Benefits Guide
• Minimum Wage by State
• Tax Refund Status