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Nike’s long restructuring plan under Elliott Hill has at least one more round to go.
A filing on Thursday with the Securities and Exchange Commission detailing a new plan approved by management that is costing the company hundreds of millions of dollars to implement.
“On February 27, the company’s management approved a plan to implement certain organisational changes, which together with previously approved actions, are expected to result in pre-tax charges of approximately $300 million for the nine months ended February 2026,” the filing said.
Most of that $300 million is associated with employee severance costs, the filing said, and will be recognised in the third quarter of the company’s fiscal 2026 year. That includes the company’s nearly 800 layoffs announced in January as well as subsequent layoffs at Converse.
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The filing states that there could be additional charges in future quarters as the company “continues to evaluate opportunities” and “may take additional actions.” It did not specify what those additional actions might be.
In a research note, BNP Paribas Analyst Laurent Vasilescu proposed that this may all be a preamble to the eventual sale of Nike’s struggling Converse brand.
Converse’s sales dipped by 30 percent to $1.7 billion in Nike’s second quarter. Nike also slashed its demand-creation budget by 44 percent down to $24 million. Considering the circumstances, Vasilescu believes all signs point to Nike eventually moving on.
“We think Converse could be the ‘Costs Associated with Exit or Disposal Activities’ referenced in tonight’s 8-K,” he wrote, noting that the company had slashed its investment in growing demand for the brand.
“We’ve never seen a brand manager cut demand creation by half (the lifeline of a brand),” he wrote. “The severe cut suggested to us that Nike may look for an exit strategy for Converse, capping a long history of divestitures.”
In a statement, Nike said it remained committed to Converse.
“We believe in the iconic Converse brand and the steps being taken to evolve into the Sport Offense and return the business to growth,” the company said. “We are committed to the journey the team is on with new leadership in place and to the community of Boston.”
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The Chuck Taylor maker’s sales plummeted 30 percent in the latest quarter.
