Nike increased demand creation spend by 5% year-on-year to $1.3bn (£985m) in the quarter ending 31 August, even as first-quarter revenues dropped 4% to $11.2bn (£8.5bn).

The sportswear giant reported the rise in what it calls demand creation expense – covering marketing, advertising and sponsorship – "primarily due to higher brand marketing expense" tied to investment in key sports moments.

The shift contrasts with the previous quarter, when marketing spend fell 4% as Nike moved from traditional brand marketing to athlete-led storytelling.

The increased investment sits alongside a cost-cutting programme worth $2.5bn (£1.9bn) over five years, announced in a memo to staff on 1 October. The programme, called 'Pace', will mean "fewer roles across Nike", although the company has not confirmed which functions will be hit.

Despite the uncertainty around where the cuts will land, marketing has been identified as central to growth. In his memo, CEO Elliott Hill wrote: "These decisions are about redirecting investment toward the areas most critical to winning: product innovation, brand storytelling, consumer connection, sport and growth."

A turnaround still in progress

Nike has been on a turnaround mission since 2024, when Hill returned to the brand. He rejoined following a period of discounting and direct-to-consumer activity that left the business struggling.

Under its 'Sports Offense' strategy, the brand has prioritised connecting with consumers through sport events, including the 2026 FIFA World Cup. Hill claims the approach "is in fact working".

Speaking to investors, Hill said the turnaround is progressing. "Since I have returned, I believe strongly that we have strengthened the foundation of our business, and our direction is super clear that we are building Nike the right way and we are building Nike for the long term," he said.

"I would characterise that our comeback is ongoing. At our size and scale, meaningful change takes time," he added.

China drags, performance grows

The revenue picture remains under pressure. Sales in China fell 22% in the quarter. Net income dropped 2% to $712m (£539m) for the period.

Nike's performance business – spanning football, running, training, basketball, tennis and golf, and now a larger focus for the brand – reported high single-digit growth. Hill called this a "proof point" that the Sports Offense strategy is working.

"We felt it was critically important to re-anchor this company in sport. We reignited our marketing efforts. We started serving consumers across an entire marketplace, rebuilding our wholesale partnerships," he said.

A leaner structure from 2028

Pace will focus on four areas: accelerating supply chain modernisation, organising into three regions, establishing a campus in China, and changing Nike's "work and workforce".

From 2028, Nike will operate across three regions rather than four: the Americas (North and Latin America), APGC (Asia Pacific and Greater China) and EMEA. Hill said the restructure will bring "more decisions, accountability and resources closer to the markets" the company serves.

For marketers, the message from Beaverton is clear: even in a $2.5bn cost-cutting cycle, brand marketing is being treated as growth spend, not overhead.