Nike's revenue fell 4% to $11.2 billion in Q1, and the sportswear giant told analysts Thursday to expect an unspecified number of layoffs next year as it launches its third restructuring program since fiscal 2024.

The company calls the plan "Pace." Announced Oct. 1, it consolidates Nike's geographic structure into three regions: the Americas, combining North America and Latin America; APGC, combining Asia Pacific and Greater China; and EMEA, which stays as is. Nike is also investing in a more flexible supply chain, opening a campus in Bengaluru, India, and redirecting resources toward product innovation, brand storytelling, consumer connection, sport and growth.

CEO Elliott Hill said on the analyst call that Pace is designed to help "accelerate the sport offense." But executives conceded the actions needed to restore the business will cause additional pain through the current fiscal year and the next. Nike's guidance for the fiscal year foresees revenue falling in the high single digits.

The quarter exposed how uneven the recovery remains. Converse fell 28%, continuing a prolonged decline. North America grew 2%, yet every other region shrank — Greater China revenue dropped 22%. Nike also flagged "significant work ahead" in sportswear, the Jordan brand and China.

"One of the central problems is that Nike is a sprawling enterprise and far too many parts of it remain on the back foot," GlobalData Managing Director Neil Saunders said in emailed comments Thursday. "China and Converse are the two most obvious — indeed, between them they account for almost 86% of the group's net sales decline."

Saunders credited Hill's Sport Offense strategy with partial success but said Nike remains "behind the curve" in many areas. He described Pace itself as sound on its own terms, yet "a bit like rearranging deckchairs on the Titanic before dealing with the fundamental issues causing Nike to sink."

BNP Paribas senior analyst Laurent Vasilescu counted Pace as the third restructuring program since fiscal 2024 and noted the retailer has seen "no operating leverage" from any of them so far. He also challenged the company's shifting timeline.

"Two years ago, we heard from new management that the Win Now strategy would be done by the end of 2025, then it was pushed out to the end of 2026. Tonight we didn't hear anything about the Win Now strategy or at least an acknowledgement of a new timeline or goal post," Vasilescu wrote. "This would suggest that the rightsizing of the business may last for several years to come."

There were bright spots. Needham analyst Tom Nikic pointed to early signs of success in running, training and basketball, even as he rated overall turnaround visibility "very low." Nike said the Air Force 1 has regained stability after several quarters of inventory rightsizing across key footwear franchises. The Jordan brand presents the opposite problem: it is now oversupplied, and Nike will pull back on retro product to correct it.

"We know what healthy looks like and we're taking deliberate actions to get there," Hill said.

Jessica Ramírez, co-founder and managing director of The Consumer Collective, questioned whether the strategy reaches far enough. "While performance continues to show green shoots we do not believe those green shoots are enough to offset the parts of the business that still show no clear path back to positive territory or a credible plan to get there," she said in emailed comments. "In the sportswear category in particular the company feels out of touch. At this point we are questioning whether Elliott Hill may be over his head when it comes to this category and how it needs to be approached."

With China declining, Converse collapsing and guidance pointing to further contraction, marketers at Nike's partner agencies and retail accounts should brace for a multi-year reset rather than a quick rebound — Pace's layoffs land in the new year.