Oct 1 (Reuters) - Nike deepened its turnaround under CEO Elliott Hill, announcing a plan to shake up its operating model and cut more jobs after the struggling sportswear giant missed analysts' expectations for quarterly revenue on Thursday.
Like many US retailers, Nike is grappling with cautious consumer spending in the face of stubborn inflation. But its woes have largely stemmed from strategic missteps and a failure to release enough new, compelling products, analysts have said, leading to an uptick
in promotions and discounts. Its shares fell 4% in extended trading.
The company announced a new program to change its operating model, which includes efforts to modernize its supply chain and further reduce roles to save costs.
The program, building on its previously announced restructuring push, which also included job cuts, is expected to deliver about $2.5 billion in savings through fiscal 2031.
Nike expects its revenue to decline in high-single digits in fiscal 2027. The company earlier forecast revenue to decline by a low-to-mid-single-digit percentage in the first half of fiscal 2027.
Greater China remains a weak spot for Nike, while the company also faces challenges in Europe
S&P Dow Jones Indices removed Nike from the S&P 100 in September as part of a quarterly rebalancing, after 18 years in the index of blue-chip companies.
The sportswear giant posted sales of $11.2 billion for the first quarter, compared with analysts' average estimate of $11.32 billion, according to data compiled by LSEG.
Its gross margin, however, rose 60 basis points to 42.8% in the quarter ended August 31, helped by lower warehousing and logistics costs.
(Reporting by Angela Christy in Bengaluru and Danielle Kaye in New York; Editing by Shilpi Majumdar)
