What happened: Nike (NKE) stock fell as much as 6% in after-hours trading on Thursday after posting its fiscal first quarter results and announcing operational changes, which will include layoffs.

What's behind the move: Nike posted fiscal first quarter revenue of $11.21 billion, versus consensus estimates of $11.33 billion. That represented a 4% decline from the year-earlier period.

Earnings per share came in at $0.48, down from $0.49 a year ago.

The company said revenues are expected to decline in the high single digits in fiscal 2027. Nike's gross margin, however, expanded 60 basis points to 42.8%.

The company also announced operational changes in order to reduce costs and operate more efficiently.

"This work will result in fewer roles across Nike, and I want to acknowledge that news like this creates uncertainty. I don't take that lightly," wrote CEO Elliott Hill in a letter to employees.

Decisions about impacted roles will begin in calendar year 2027 and beyond.

The results come nearly two years after Hill took the helm as CEO.

"This is a quarter you'd expect from a new CEO three or four quarters in, but not two years in," CFRA analyst Zach Warring, who has a Buy on the stock, told Yahoo Finance.

The analyst noted, "Valuations and expectations have been reset."

"Now they can kind of move forward and begin to return to growth, expand margins, and start to really work on some of the geographies that they're sluggish, which is obviously greater China and Europe," he added.

Read more: Caitlin Clark's new signature Nike shoe nearly sells out within first two hours of going on sale

What else you need to know: The company was already facing challenges when Hill took over. Nike had pulled back from several major retail partners as it sought to prioritize its own sales channels, giving competitors an opening to gain ground.

The turnaround has not been easy.

"We have more work to do in NIKE Sportswear, Jordan Brand and Greater China, and we're taking deliberate actions to strengthen those businesses the right way for the long-term," Hill said in the company's earnings release.

In late August, Dick's Sporting Goods (DKS) offered up a brutal warning about its business, in part because Nike is heavily discounting slow-moving product.

Soccer icon Kylian Mbappé ended his long-term business tie-up with Nike last month and announced he will now be joining Swiss sports giant On (ONON).

Nike's stock recently dropped from the S&P 100 (^SP100) after nearly 20 years in the index.

Thursday's report is the first earnings release under new CFO Dave Denton, who previously held a role at Pfizer.

Ines Ferre is a senior business reporter for Yahoo Finance.

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