Nike Plunges 8% on Grim Outlook, Layoffs and India Campus

Nike stock sank more than 8% after it forecast high-single-digit sales declines and announced job cuts as part of a deepening turnaround.

Nike shares plunged more than eight percent in after-hours trading on Thursday, falling to $32.20, down 8.19%, after the company reported a downcast quarter and a bleak revenue outlook. The stock had closed the regular session at $35.15, down 0.71%, before the earnings release triggered the after-hours rout. The Economic Times reports the drop came alongside news that Nike plans to cut an undetermined number of jobs and build a new campus in Bengaluru, India, as it seeks to accelerate a turnaround following another weak quarter.

The surprise was not the modest profit decline but the forward guidance. Neil Saunders, managing director of GlobalData, called the outlook 'shabby,' telling The Economic Times that 'Nike's brand heat continues to fade and it isn't powerful enough to punch back against more nimble competitors.' Investors who had hoped a two-year-old turnaround was gaining traction instead got confirmation the recovery has further to run.

The quarter ending August 31, the first quarter of Nike's fiscal 2027, showed a two percent drop in quarterly profits to $712 million and a four percent revenue decline to $11.2 billion. Both The Economic Times sources report that outside North America, where revenues grew two percent, Nike saw declines in every other region, with Greater China especially weak: revenues there fell 22 percent to $1.2 billion. CEO Elliot Hill also cited the need for improvement in sportswear and the Jordan brand, the pillars of Nike's product portfolio.

Elliot Hill rejoined Nike as CEO in October 2024 to fix problems including an oversupply of poorly selling items and an ill-conceived shift to direct sales that left the company underrepresented with key retailers. He told analysts the company has made progress since his return, but that a comprehensive review showed deeper changes were needed. 'We're building Nike for the long term,' Hill said on the conference call, during which he touted the company's growing relationship with women's basketball star Caitlin Clark. The credibility of his reset now rests on delivering through a shrinking year.

Hill said in a message to employees that Nike 'must make changes to become a more agile, efficient and athlete-focused company,' and that the shifts 'will result in fewer roles across Nike.' He acknowledged the uncertainty and promised transparency, saying decisions about impacted roles will begin in calendar year 2027 and beyond. At the same time, Nike plans a new campus in Bengaluru, India, described as a long-term investment in new capabilities and talent to strengthen how the company serves athletes globally, including in India — a growth bet even as the core business contracts.

With fiscal-year revenue guided down by high-single digits, investors now face a rare stretch in which Nike's topline shrinks rather than stabilizes. Hill's promised transparency means layoffs detail should emerge from calendar year 2027 onward, and execution on the sportswear and Jordan brand fixes will be the metrics to watch.