Nike shares plunged Friday after the athletic apparel maker cut its revenue outlook for the fiscal yr, with sneaker retailer Foot Locker also feeling the blow.
Nike fell greater than 11%. Foot Locker, which relies heavily on Nike products in its stores, was down greater than 4%.
Shares of Nike are on the right track for his or her worst day since Sept. 30, 2022, when it fell 12.8%.
Nike said in its earnings report Thursday that the corporate now expects its revenue to grow 1% for the fiscal yr, down from the prior outlook of mid-single-digit growth. The corporate also said it was going to chop costs of upward of $2 billion over the subsequent three years.
The brand new outlook reflects increased headwinds “particularly in Greater China and EMEA,” finance chief Matthew Friend said within the earnings call Thursday. He also noted digital traffic softness and a stronger U.S. dollar that has “negatively impacted second-half reported revenue versus 90 days ago.”
“Nike needs improved marketing outside of basketball, streetwear and lifestyle trends,” TD Cowen analysts said in a Friday note, downgrading the stock to market perform from outperform. “Innovation at the upper end of its assortment isn’t resonating at scale while the Nike faces disruption from smaller competitors in footwear and apparel.”
Goldman Sachs analysts stuck with their buy rating on Nike’s stock.
But in addition they acknowledged that the corporate’s report “provided ample fodder for bears, with slowing growth momentum because of this of a tougher macro pointing to a more promotional competitive marketplace, and the corporate now speaking more comprehensively to key franchise life cycle management which can weigh on sales momentum going forward.”
— CNBC’s Gabrielle Fonrouge and Michael Bloom contributed to this report.
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