Nike to Record $300 Million Charge From Cost-Cutting Efforts -- Update

By Katherine Hamilton

Nike expects to record a charge of $300 million related to cost-cutting efforts, including job eliminations.

The charge is primarily associated with employee severance costs, most of which were recognized in its current quarter, Nike said in a Thursday filing.

Management approved in late February a plan to implement certain organizational changes as part of its review of ways to run the company more efficiently and profitably, the sneaker company said.

In January, Nike said it was laying off about 775 workers as part of its turnaround strategy. The cuts were expected to affect workers at Nike's distribution centers in Tennessee and Mississippi, amounting to about 1% of total workforce.

Chief Executive Elliott Hill told investors in December that Nike was still in the "middle innings" of its turnaround plan, as costs from investments in the business were continuing to squeeze margins.

Nike said Thursday it is continuing to evaluate opportunities to operate more efficiently and profitably by realigning costs. It may take additional actions that could lead to additional charges in future quarters.

Nike has been trying to pivot back to high-performance athleticwear after a long spell of selling casual footwear. The company has fallen into a pattern of sales declines in recent years, and expects revenue to fall by a low single-digit percentage in the current quarter.

Nike's margin decreased by 3 percentage points in its last quarter, which the company said was due to increased product costs from tariffs.

The company's business in China has also been particularly slow to recover. In the fiscal second quarter, which ended Nov. 30, 2025, revenue in Greater China fell 17% due to a drop in footwear sales. That offset its 9% sales increase in North America.

Write to Katherine Hamilton at [e-mail]

(END) Dow Jones Newswires

03-05-26 1727ET