Nike sparked more speculation about a Converse sale on Thursday evening when the Swoosh issued its latest 8-K filing with the Securities and Exchange Commission (SEC).
In the new regulatory filing, Nike said the company’s management approved a plan to implement certain organizational changes, which together with previously approved actions, are expected to result in pre-tax charges of approximately $300 million for the nine months ended Feb. 28.
Nike stated in the filing that the charges were primarily associated with employee severance costs, and substantially all recognized in the third quarter of fiscal year 2026.
Some of these cuts included nearly 800 jobs to consolidate its U.S. distribution center operations across facilities in Tennessee and Mississippi in January. And just weeks later, Converse set its own cuts, although exact numbers of who was impacted were not disclosed at the time.
“Nike, Inc.’s management has been evaluating opportunities to operate more efficiently and profitably through realigning costs, while also investing to reignite growth,” the 8-K filing stated. “The company continues to evaluate opportunities and may take additional actions which could lead to additional charges in future quarters.”
Now, BNP Paribas Equity Research senior analyst Laurent Vasilescu is back with a new research note further pushing his claim that Nike may be setting the stage for its sale of Converse.
“We would point to the [8-K] preamble ‘Item 2.05 Costs Associated with Exit or Disposal Activities’ which suggests Nike is exiting a business,” Vasilescu wrote in his most recent note. “Could this be the exit or disposal of Converse we flagged in our January 10Q note? We believe it could be.”
The market watcher also cited Nike’s restructuring plan revealed in 2024 to save $2 billion by fiscal year 2026. “Yet SG&A (Selling, General & Administrative expenses) is flat since then,” he wrote.
Vasilescu’s January note suggested that Nike could be considering a sale of Converse – indicating that the “underlying health” of the brand is “more precarious” than first thought.
The analyst pointed to challenges Converse has seen of late, including a 28 percent decline in revenues in the first quarter and with sales dropping another 31 percent in Q2 – leading to EBIT (Earnings Before Interest and Taxes) of Converse “dipping into the negative territory” for the second quarter.
“We think the underlying health of Converse is more precarious as the average selling price pressure would suggest sell in into off-price and therefore sell in into key accounts could be down more than 30 percent,” Vasilescu wrote in January. “A potential divestiture would not be Nike’s first. Rather, it would cap off a long history of divestitures from Cole Haan, Umbro, Starter, Bauer and Hurley. A divestiture of Converse would finalize the divestiture of Nike’s all acquired brands, a further testament that brand acquisition is hard to pull off.”
While details on the company’s efforts to overhaul Converse were not disclosed on Nike’s Q2 earnings call in December, management made it a point to disclose that it is “resetting the marketplace with new leadership” – referring to 21-year Nike veteran Aaron Cain taking on the Converse chief executive officer role in July, succeeding Jared Carver.
Nike noted in its earnings release that it is expecting Converse to experience continued headwinds for the balance of the fiscal year as revenues for the brand were $300 million in Q2, down 30 percent on a reported basis, due to declines across all territories.
Nike will report its third quarter 2026 earnings on March 31.
