Nike cuts FY2024 outlook, launches $2.5 billion Nike

Nike told investors Thursday that fiscal‑year 2024 revenue will fall by a high‑single‑digit percentage, deeper than the 2.4% decline analysts had forecast. At the same time the company announced a global Nike restructuring plan that will merge its Greater China unit into an expanded Asia‑Pacific division and combine its Latin America and North America businesses, targeting $2.5 billion in cost savings over five years.

The news sent Nike shares down about 6% in regular trading, marking a second consecutive session of loss and leaving the stock with a year‑to‑date decline of roughly 45%.

The revised outlook and re‑org highlight growing earnings pressure for the sneaker maker. Investors now have to weigh the upside of a leaner cost base against the risk of continued revenue weakness and a pretax charge estimated at $1 billion.

Analysts reacted sharply. UBS’s Jay Sole cut his 12‑month target to $34 from $42 and kept a neutral rating. Morgan Stanley moved to an underweight stance with a $27 target, down from $31. By contrast, Guggenheim upgraded Nike to a buy with a $50 target, down from $60, and CFRA maintained a buy rating with a $62 target. Bloomberg’s consensus shows 15 buys, 25 holds and 7 sells, with an average 12‑month target of $40.

The restructuring will affect roughly 1,500 positions, according to a memo from CEO Elliott Hill. Hill said the changes “will require fewer roles over time” as Nike seeks to streamline operations and improve margins. Consolidating Greater China into a broader Asia‑Pacific unit and merging Latin America with North America are intended to reduce overlap and create a more agile regional structure.

While the plan promises $2.5 billion in savings, the immediate $1 billion pretax charge will depress earnings this year. Employees in the affected regions face heightened layoff risk, and retail partners may see inventory adjustments and reduced promotional support as Nike tightens its cost base. Consumers could encounter higher prices if the company scales back discounting to protect margins, and rivals may capture market share while Nike’s momentum stalls.

The market reaction underscores the uncertainty surrounding Nike’s path forward. Some analysts view the restructuring as a necessary reset; others warn that the revenue decline points to deeper demand weakness that cost cuts alone cannot fix. Nike’s November analyst day will be the next major catalyst, offering investors a chance to gauge whether the strategic pivots can reverse the steep share‑price decline.

For now, investors will watch the execution of the re‑org, the impact of pretax charges on quarterly results, and any further guidance on revenue trends. The key question remains whether Nike can translate its cost‑saving agenda into a sustainable rebound or whether the stock will continue its slide amid lingering doubts about demand and execution.