The sports apparel company’s stock fell 11% on Friday morning after management highlighted a deteriorating sales outlook in markets around the world and extensive cost-cutting plans.
Nike has announced layoffs and expects sales to decline due to weak consumer spending. The dismal earnings report hurt other apparel companies, including Dick’s Sporting Goods (DKS) and Lululemon (LULU).
In another sign that the story of a resilient consumer is fading, Nike Chief Financial Officer Matt Friend said on an earnings call that the weakening outlook “requires more caution around the world.” “Signs of consumer behavior,” he said, pointing to markets in China, Europe and the Middle East. , and Africa.
Nike, a prominent component of the Dow 30 index, announced plans to streamline its lineup, increase automation and further engage customers with new products.
“While we appreciate the focus on margins, we are concerned that the sales trends are less than exciting, and we believe that new and innovative This suggests that this is insufficient.” Duffy and his colleagues say that while external factors such as China can explain some of the gap in expected revenue declines, the decline in digitalization is “shaking CEO John Donahoe’s confidence with investors.” said.
