turnaround was on display again on Thursday when Nike announced another round of job cuts and forecast steeper-than-expected declines in sales and profit for the fiscal year ending in May 2028. “Things are going to get worse before they get better,” RBC Capital Markets analyst Piral Dadhania said. That timeline was reinforced by Nike’s disclosure that most of the savings from its overhaul will not be realized until fiscal 2029 and 2030. Nike on Thursday once again flagged performance in sportswear, China and its legacy Jordan brand as problem areas. Together, they accounted for more than half of total sales. Investor day in focus Nike’s turnaround challenges have become a test of investor faith in CEO Hill’s strategy ahead of its investor day on November 16 and 17, where analysts expect the company to provide a clearer roadmap for restoring growth and profitability. Hill was brought back to steady a company that had lost its footing under a strategy that prioritized direct sales and reduced ties with wholesale partners, while leaning heavily on a shrinking roster of lifestyle products instead of its core sports strategy. Since returning, he has moved to rebuild relationships with retailers, refocus product development on sports and simplify operations. Yet revenue continues to decline across wholesale and direct channels. “Nike really needs to show that it can at least bail out problems faster than taking them on,” said Neil Saunders, managing director of GlobalData. “The job cuts and associated cost-cutting will buy time and may support margins and the bottom line – but these things are not the solution to the brand problems that are the cause of decline,” he said. Shares were down about 8 per cent at $32.22 in early trading on Friday, around their lowest level in 12 years and far behind a 2021 peak of about $175. The challenges are more evident in China, once one of Nike’s most important growth engines but now a problem area. Hill acknowledged on Thursday that efforts to stabilize the market will take “multiple seasons” and will weigh on profitability. “With the November analyst day ahead, we would assume management likely preferred to get the “bad news” out of the way to offer up a more positive tone in person, but clearly there has been plenty of “bad news” to spare,” said Simeon Siegel, analyst at Guggenheim. The Jordan brand offered another illustration of the work that remains. Nike is trying to return the franchise to premium growth by reducing the number and frequency of retro sneaker launches after years of oversupply and discounting. “Simply put, we’ve been oversupplying our iconic retro product, asking them to do too much,” Hill said. He admitted that a “lack of energy in the lifestyle space” was hurting traffic, but said it was up to Nike as the industry’s leader to bring back more innovation and creativity to the category. “Good thing Nike excels in running shoes because they continue to have an uphill climb ahead of them,” said Greg Zakowicz, e-commerce and retail advisor at online marketing firm Omnisend. “Its plan may be more challenging than first expected.” Reporting by Juveria Tabassum and Angela Christy in Bengaluru. Editing by Lisa Jucca and Arun Koyyur. All courtesy of Reuters. Further reading: Nike plots job cuts as sales decline continues