Nike reported fiscal 2027 first-quarter results on Thursday, Oct. 1. Revenue fell 4 percent to $11,213 million, but profit barely moved. The company also announced Pace, a multi-year operating-model program that includes cost cuts.
One region explains most of the Nike Brand decline
Nike Brand revenue fell $410 million, from $11,362 million to $10,952 million. Company-wide revenue fell $507 million, which includes Converse. Greater China fell from $1,512 million to $1,180 million, a drop of $332 million. By Plainly Now’s arithmetic, that is about 81 percent of the Nike Brand decline. The region’s revenue was down 22 percent as reported and 26 percent currency-neutral (excluding exchange-rate effects). Its earnings before interest and taxes fell 34 percent, from $377 million to $248 million.
North America grew 2 percent to $5,127 million. Europe, the Middle East and Africa slipped 5 percent. Asia Pacific and Latin America fell 2 percent as reported and were flat currency-neutral. Converse fell 28 percent to $263 million.
Footwear fell 6 percent to $6,951 million while apparel rose 2 percent to $3,384 million.
Nike Direct, Nike Brand’s own stores and digital sales, fell 8 percent (9 percent currency-neutral), including a 13 percent drop in digital; wholesale slipped 1 percent.
Profit held, helped by lower costs
Net income was $712 million, down 2 percent, and diluted earnings per share were $0.48 against $0.49 a year earlier. Gross margin rose 60 basis points (0.6 percentage points) to 42.8 percent, which Nike attributes “primarily” to “lower warehousing and logistics costs.”
Gross profit fell 3 percent to $4,798 million and the tax rate rose to 22.7 percent from 21.1 percent, but lower overhead and a swing in other income, from a $23 million expense to $19 million of income, kept pre-tax income level: $921 million against $922 million.
Operating overhead fell 6 percent to $2,658 million, “primarily due to lower wage-related expense and lower other administrative costs.” Demand creation, the marketing line, went the other way: up 5 percent to $1,252 million on “higher investment in key sports events.”
What Pace is on paper
Nike calls Pace “an operating model transformation to accelerate and scale the success of the Sport Offense.” It “includes and builds upon” the cost realignment plan Nike says was announced in March 2026. The listed efforts are to modernize the global supply chain, establish a new campus in India, realign to three geographies, and further streamline “the organization to reduce costs.”
Nike expects “approximately $2.5 billion in cumulative savings through fiscal 2031,” with about $1.0 billion of pre-tax charges, “primarily consisting of employee-related costs,” through fiscal 2031. That is “in addition to” about $0.3 billion of severance recognized in fiscal 2026. About $0.3 billion of the new charges is expected in fiscal 2027. By Plainly Now’s arithmetic, those two figures add up to roughly $1.3 billion in charges, mostly employee-related, across fiscal 2026 through 2031 (Nike does not state this sum).
The savings number is cumulative over several years, not annual. And Nike says it is stated “before the expected pre-tax charges” and “any future reinvestment,” so it is not a net figure.
What Nike does not say
Neither the earnings release nor the Form 8-K gives a number of jobs affected. For scale, Nike had about 73,000 employees worldwide on May 31, 2026, including retail and part-time staff, according to its annual report; neither document ties any number of roles to Pace.
The outlook
For fiscal 2027, Nike expects revenue to “decline high-single digits.” It expects adjusted diluted earnings per share (a non-GAAP measure) of $1.15 to $1.35, which “excludes approximately $0.15 of restructuring expenses related to Pace.”
CEO Elliott Hill said, “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.”