Nike Shares fell sharply on Friday after the sports apparel maker cut its fiscal year earnings outlook. foot locker I also feel the blow.
Nike closed down more than 11%. Foot Locker, which relies heavily on Nike products in its stores, has closed nearly 4% of its stores.
This was Nike’s worst day since September 30, 2022, when it fell 12.8%.
Nike said in its earnings report Thursday that it expects sales to increase 1% this quarter, a downward revision from its previous forecast for mid-single-digit growth. The company also announced cost savings of more than $2 billion over the next three years.
Finance chief Matthew Friend said on Thursday’s earnings call that the new outlook reflects stronger headwinds “particularly in Greater China and EMEA.” He also noted that softer digital traffic and a stronger US dollar were “negatively impacting reported revenue in the second half compared to 90 days ago.”
“Nike needs to improve its marketing outside of basketball, streetwear and lifestyle trends,” TD Cowen analysts said in a note Friday, downgrading the stock to market perform from outperform. “While Nike faces disruption from smaller competitors in footwear and apparel, innovations in its luxury assortment have not resonated on a large scale.”
Analysts at Goldman Sachs maintained a buy rating on Nike stock.
However, they also noted that the company’s report provided “ample fodder for the bears, with growth momentum slowing as a result of tighter macro policies suggesting a more pro-competitive market.” “And the company is now talking more comprehensively about the lifecycle management of its key franchises.” Regarding future sales momentum. ”
—CNBC’s Gabriel Fonrouge and Michael Bloom contributed to this report.
Don’t miss the next story from CNBC PRO.