Nike's Turnaround Math: A 26% China Slide, $2.5 Billion in Planned Savings, and Two Banks Slashing Targets

Nike posted a 4% revenue decline and a 26% drop in Greater China, while unveiling new competition running shoes and a restructuring plan.

Nike is trying to run its way out of a slump. The sportswear giant has unveiled a fresh lineup of competition running shoes, a category that sits at the heart of its heritage but where it has lately ceded ground to rivals. The new models are set to roll out over the coming months, with the Apex arriving in January 2027 and the Swooshfly following in February 2027.

The product push lands at an awkward moment. Investor faith in Nike's ability to innovate its way back to relevance is being tested, and the company is simultaneously tearing up its own org chart.

A Leaner Structure, a Lofty Savings Goal

That overhaul carries the name "Pace." Under the program, Nike will reorganize into three geographic regions and trim its organization further, with decisions on affected roles slated to begin in 2027. Management has attached a hard number to the effort: roughly $2.5 billion in cumulative savings by fiscal 2031. How many jobs will ultimately be cut has not yet been determined, according to the company.

The cost-cutting runs alongside a business that is still shrinking. Nike's guidance points to a high-single-digit percentage decline in revenue for the full fiscal year 2027.

The Quarter That Triggered the Selling

The numbers behind that outlook arrived Thursday, covering the first quarter of fiscal 2027, which ended August 31, 2026. Revenue fell 4% to $11.21 billion. The sharpest wound was in Greater China, where sales plunged 26% on a currency-neutral basis.

Gross margin offered one bright spot, rising 60 basis points to 42.8% — a detail that did little to calm nerves.

Wall Street's response was swift. By Friday's close, the stock had dropped 3.6% to EUR 30.10. Reuters reported that the shares had at one point tumbled roughly 8% during early U.S. trading. The latest losses leave the stock trading not far from its 52-week low of EUR 27.91.

Analysts Race to Cut Targets

Several research houses trimmed their expectations in the wake of the print. Morgan Stanley lowered its price target to $27 from $31 while keeping an "Underweight" rating, according to media reports. UBS cut its target to $34 and maintained a neutral stance. Other institutions also pared back their estimates.

The skepticism is not confined to that one session. On September 25, Bank of America downgraded Nike from Neutral to Underperform, slashing its target to $30 from $47. The analysts cited a turnaround taking longer than expected and weaker profit prospects.

The stock now trades at EUR 30.25 and is down 42% since the start of the year.

What Hinges on the New Silhouettes

For all the restructuring arithmetic, the near-term verdict may rest on whether the revamped competition line can reignite momentum with serious runners. Nike has lost ground in a category it once owned, and the coming months will show whether the new generation of shoes — starting with this month's launch — can pull customers back. That question, more than any spreadsheet, will shape how the stock is valued from here.