Nike reported a 4% drop in quarterly revenue and announced layoffs beginning in 2027 as part of a restructuring plan, sending shares down about 6% in Friday trading.

Fiscal first-quarter revenues fell 4% to $11.2 billion, weighed down by declines in Greater China that were partially offset by growth in North America. Net income reached $712 million, a 2% decrease from $727 million the previous year.

The company expects revenues to decline in the high-single digits in 2027.

Nike introduced a new operating model called "Pace" designed to deliver $2.5 billion in cost savings by 2031. The program includes modernizing the global supply chain, reorganizing operations into three geographies, establishing a new campus in India, and streamlining the broader organization.

"Decisions about impacted roles related to this work will begin in calendar year 2027 and beyond," Nike President and CEO Elliott Hill said, acknowledging that the restructuring creates uncertainty for employees.

The company has already reduced its workforce twice this year, cutting 775 jobs at U.S. distribution centers in January and eliminating 1,400 roles in the tech division in April.

Citi analysts maintained a "neutral" rating on the stock, noting that sales guidance fell below market expectations. "It isn't out of the question that Nike can beat some of the guidance they just provided, but there really is no justification (in our view) for Nike to receive a premium multiple versus its growing peers," the analysts wrote. The analysts added that details on when the Pace program will actually impact results will not arrive until 2029.

Citi described Nike as becoming a cost-cutting story as management addresses significant pressure within Sportswear, Jordan, and China. Hill pointed to needed improvements across the company's apparel division, Jordan brand, and China operations, vowing to take deliberate steps to build those units over the long term.