Nike announces austerity measures with $2.5 billion in savings

Beaverton. Adidas' rival Nike is resorting to stricter austerity measures in order to get out of its partly home-made crisis. The restructuring program is expected to bring savings of $2.5 billion over the coming years, the sporting goods group announced when it presented quarterly figures. The measures will also include job cuts, Nike CEO Elliott Hill said in a conference call with analysts.

In the last quarter, sales fell four percent year-on-year to $11.2 billion. The bottom line is that profits fell by two percent to $712 million. Consumers are cautious about their spending, Hill said. For the fiscal year that runs until the end of May 2027, Nike forecast a decline in sales in the high single-digit percentage range. The share temporarily fell by around four percent in after-hours US trading.

Nike is looking to find its way out of a depression into which the company had maneuvered itself. In recent years, the group has relied heavily on direct sales at the expense of retailers. Particularly in the US market, competing brands were able to take shelf space from Nike in stores - and sales suffered as a result. The company is now seeking a better relationship with its retail partners.