Shares of after executives highlighted a weaker sales outlook for markets around the world and a major cost cutting initiative.
Nike said it would cut jobs and expected sales to flag as consumer spending faltered. The damaging earnings report dragged other apparel companies down, including Dick’s Sporting Goods () and Lululemon ().
In another sign that the narrative around the resilient consumer is fading, Nike CFO
Matt Friend said during the earnings call that the weaker outlook follows “indications of more cautious consumer behavior around the world,” pointing to markets in China, Europe, the Middle East and Africa.
Nike, a stock closely watched as part of the Dow 30 index, to simplify its lineup, boost automation and work harder to attract customers with new products.
“While we appreciate the attention to margin, uninspiring topline trends are concerning and suggestive of insufficient newness and innovation,” said Jim Duffy, a research analyst at Stifel, in a note on Thursday after earnings. Duffy and his colleagues said that external factors such as China explain away some of the gap in lower revenue projections, the fading in digital “is challenging CEO John Donahoe’s credibility with investors.”