Nike’s Pace Overhaul Pushes the Repair Into 2029

Nike’s first-quarter sales fell 5% in constant currency to $11.2 billion, and the company told staff that Pace will mean fewer jobs from 2027. Shares dropped 6% after hours on October 1, 2026, leaving the stock at its lowest level since 2013.

The quarter matched Nike’s own plan. The year ahead does not. Management now expects fiscal 2027 revenue to fall by a high-single-digit percentage, and most of the $2.5 billion Pace says it will save will not show up until fiscal 2029 and 2030.

The Quarter Matched Nike’s Plan

The period ended August 31, 2026. On a reported basis, sales were down 4%. Diluted earnings per share were $0.48, and net income was $0.7 billion, down 2%. Gross margin widened 60 basis points to 42.8%, helped by cheaper warehousing and logistics, while selling and administrative expense fell 3% to $3.9 billion.

President and CEO Elliott Hill, two years into the job, said Nike’s performance business grew by another high-single-digit rate after last fiscal year’s $16 billion performance book. That still was not enough. “Despite that progress, our Nike performance business is not yet large enough to offset the pressure we’re seeing in Nike sportswear, Jordan brand, and greater China,” he told investors.

New CFO Dave Denton, who joined on August 17, said the print was “consistent with our expectations.” Wholesale almost held still. Nike Direct did not.

Q1 FISCAL 2027 AT A GLANCE

Digital sales through Nike’s own sites fell 13%, and Nike-owned stores fell 5%. Demand creation spending rose 5% to $1.3 billion because the company put more money into sport events, while operating overhead dropped 6% to $2.7 billion on lower wage-related and office costs. Inventories were $7.8 billion, down 3%. Cash and short-term investments were $8.4 billion, and Nike returned about $610 million through dividends, up 3%.

Pace Extends a Year of Staff Cuts

Pace is not the first reset of 2026. Hill’s employee note on the operating model told the company the work “will result in fewer roles across Nike,” and that decisions on who is affected “will begin in calendar year 2027 and beyond.” He said Nike does not yet know the number of roles or the locations.

That follows two already-announced rounds. In January, Nike cut about 775 jobs at distribution centers. In April, it cut about 1,400 roles in global operations, mostly in technology, after a March plan that booked about $0.3 billion in severance in fiscal 2026.

THE 2026 CUTS BEFORE PACE

1. January 2026: Nike cuts about 775 distribution-center jobs in the United States.
2. March 2026: Management approves a cost-realignment plan and books about $0.3 billion in severance.
3. April 23, 2026: About 1,400 operations and technology roles are cut across North America, Europe and Asia.
4. October 1, 2026: Pace is announced as an overlay on the March plan, with role decisions starting in calendar 2027.

Hill told staff Pace “is not a new strategy, and it is not a reaction to one quarter.” The fiscal 2027 first-quarter results still forced him to put a second operating model on top of the first. “The purpose of Pace is clear, to accelerate the sport offense,” he said on the call. “The sport offense has proven itself. Pace is how we scale it.”

The Sport Offense is driving measurable progress across our performance business, and we introduced Pace to help us accelerate and scale that momentum across NIKE. We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we’re taking deliberate actions to strengthen those businesses the right way for the long-term.

Elliott Hill, President and CEO, NIKE, Inc. earnings release

Greater China Still Outruns the Performance Gain

North America grew 2%. EMEA fell 5%. Greater China, the hole Hill keeps naming, fell 26%. Nike Brand revenue was $11.0 billion, down 4%, “primarily due to declines in Greater China and EMEA, partially offset by growth in North America,” the company said.

Hill told investors the new China leadership team has spent six months tightening digital channels and refreshing stores. Recovery, he has said, will take multiple seasons. Denton warned that the sportswear, Jordan and China actions will keep pressure on reported sales for the rest of fiscal 2027 and into fiscal 2028.

Converse is a smaller book and a louder warning. The brand took in $263 million, down 28% in every territory. A lifestyle name that once filled the gap when performance cooled is now shrinking faster than the parent.

The mix is the bind. Performance can grow at a high-single-digit clip and still lose the quarter when China drops by a quarter and sportswear and Jordan keep sliding. Hill’s own line on the call was that the performance business is “not yet large enough to offset” those three. Pace does not change that math this year. It changes how the company is staffed while it waits.

Jordan and Sportswear Will Be Put on a Diet

Hill named three books that need special work, and each fix is a choice to sell less, or sell slower, before selling better. He is taking volume out of the market on purpose.

THREE BOOKS NIKE IS SHRINKING TO REPAIR

• Nike Sportswear: Franchises will be split into tighter focus areas, the way performance lines already are, because “the sportswear consumer isn’t one audience.”
• Jordan Brand: Launch frequency will fall so the Jumpman feels scarce again. “When consumers see the jump man, it should feel special,” Hill said.
• Greater China: Digital doors get tighter and physical stores get a refresh, after a 26% revenue drop in the quarter.

Denton said Nike will “continue to take actions to reduce supply across key parts of the marketplace” so full-price selling can recover. He also said those actions “will create pressure on reported revenues for the remainder of fiscal 2027 and into 2028.” The 13% drop in Nike Brand Digital is the first print of that choice: fewer promotions, less traffic, a worse Direct number.

Wholesale, down 1% to $6.8 billion, is the quieter channel. Partners absorbed more of the quarter than Nike.com did. If the company keeps starving its own sites to restore price, those partners become the path that still works, at least until the next product cycle lands.

Hill still pointed to a running “race day system of speed”: the Alphafly 4, due in October 2026; the Apex in January 2027; and the Swooshfly in February 2027. That is the Sport Offense in a box. It is also a small slice of a company whose biggest books are the ones he is putting on a diet.

Why Kylian Mbappé Left Nike for On

On September 18, 2026, Swiss brand On announced On’s entry into football with Mbappé, and named Thierry Henry director of football. Mbappé’s Nike deal had expired on July 31. The partnership dated to 2006, when he was a child.

On said the deal includes cash and equity and that Mbappé will work with its product teams on football boots due in 2027. Nike said it was proud of what the two sides built and wished him well. A person familiar with the talks has said Nike chose not to renew and to put the money elsewhere.

From the beginning, what drew me to On was the opportunity to build something entirely new together that will help shape tomorrow’s game. I want to bring my experience and perspective into what we create, push what’s possible through innovation, and always stay true to the joy of football. We have a shared dream, and this is only the beginning.

Kylian Mbappé, On football announcement

Lamine Yamal had already gone to Adidas. Harry Kane went to Skechers. Ousmane Dembélé left too. Hill’s Sport Offense was supposed to put athletes back at the center after years of lifestyle volume. The roster still leaks toward brands that will give a player equity, a signature line, or a clean sheet.

Nike still holds Erling Haaland and Vinicius Junior, and it extended the French national-team kit deal into 2033-34, so Mbappé will wear a Swoosh for France even after he left the boot contract. The point is narrower. Challenger brands are now writing football the way On wrote tennis with Roger Federer: pick one face, attach equity, and walk into a category Nike used to close off.

The S&P 100 Seat Lasted Nearly 18 Years

S&P Dow Jones Indices announced on September 4, 2026, that Nike would leave the S&P 100 before the open on September 21. The firm said the S&P 100 changes effective September 21 make each index “more representative of its market capitalization range.” Nike stays in the S&P 500. It still trades on the New York Stock Exchange as NKE.

Honeywell Aerospace, Simon Property Group and Colgate-Palmolive left the same list. Dell Technologies, Palo Alto Networks, Arista Networks and Sandisk went in, all listed as information technology. Nike had been in the S&P 100 for nearly 18 years.

The company sent executives a memo after the headlines, reminding them the S&P 500 seat was intact and that the change “does not affect our business, strategy, operations, or public listing.” Index funds that copy the S&P 100 had to sell. Funds that copy the S&P 500 did not. The mechanical flow is small next to a stock already at a 2013 low. The signal is the market cap that no longer belongs in a 100-name mega-cap list.

Most of the $2.5 Billion Lands After 2028

Pace has four parts in Hill’s note: faster supply-chain work, three geographies instead of four, a new campus in Bengaluru, India, and a smaller workforce. The Americas will combine North and Latin America. APGC will combine Asia-Pacific and Greater China, with that leadership team based in Singapore and some Beaverton roles moving closer to those markets in fiscal 2028. EMEA stays as it is. “We’ll reduce layers and move more resources to the country’s territories and cities,” Hill said.

Bengaluru is already a Nike technology hub. The new campus is meant to grow over several years, with full-time staff supporting Nike, Jordan Brand and Converse. Teammates already in India will move in phases. April’s 1,400-role cut had already pointed technology work at Beaverton and India. Pace makes that shift a named campus.

WHAT WE KNOW

• The savings target: About $2.5 billion in cumulative savings through fiscal 2031, before charges and any money put back into the business.
• The charge: About $1.0 billion of pre-tax costs, mostly employee-related, through fiscal 2031, on top of the $0.3 billion already taken in fiscal 2026.
• This year’s slice: About $0.3 billion of Pace charges in fiscal 2027, or roughly $0.15 a share, which is left out of the adjusted EPS range.

WHAT IS UNCONFIRMED

• Headcount: Nike has not said how many jobs go, or in which cities, and Hill told staff that outside guesses are speculative.
• Reinvestment: The company has not said how much of the $2.5 billion will be spent again on product, sport and stores.

Denton said the bulk of the savings should arrive in fiscal 2029 and 2030, with the full run-off into fiscal 2031. For fiscal 2027, Nike guided a high-single-digit sales decline, a mid-20 percent tax rate, and adjusted diluted EPS of $1.15 to $1.35, which excludes about $0.15 of Pace costs. EBIT is expected to fall by more than revenue.

THE PACE MONEY

A 4% sales drop in the first quarter, followed by a high-single-digit drop for the full year, means the next three quarters have to be worse than the one Nike just called “in line.” That is the reckoning. Performance is growing. China, Jordan, sportswear and Converse are still taking more off the top than Pace can put back, and the cost plan’s real money is a 2029 story.

Hill said Nike will give a fuller financial plan at Investor Day on November 16 and 17, 2026, at the Beaverton campus, then brief staff again on November 18. Until then, the company is asking investors to live with a smaller Nike on purpose, and asking its own people to wait until 2027 to learn whose jobs that smaller Nike still needs.

Disclaimer: This article is news reporting and analysis of Nike’s public earnings materials, employee note and related company statements, and it is for information only. It is not investment advice, a recommendation to buy or sell Nike stock or any other security, or a forecast of future returns. Readers should consult a licensed financial adviser or other qualified professional who can review their own holdings, time horizon and risk before making any investment decision. Figures, guidance and program details reflect the company’s statements as of the October 1, 2026 release and may change as Nike refines Pace, reports later quarters or updates its outlook.