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Nike And Foot Locker Stocks Plummet As Revenue Forecast Is Slashed.

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Nike And Foot Locker Stocks Plummet As Revenue Forecast Is Slashed.

(CTN News) – Nike experienced a significant decline in its shares on Friday as the company revised its revenue forecast for the fiscal year.

This downward trend also affected Foot Locker, a sneaker retailer heavily reliant on Nike products, which saw a decrease in its stock as well.

Nike’s shares closed with a decrease of over 11%, marking its worst performance since September 30, 2022, when it experienced a decline of 12.8%.

In its earnings report released on Thursday, Nike announced that it now anticipates a 1% growth in revenue for the fiscal year, a significant decrease from its previous projection of mid-single-digit growth.

Additionally, the company revealed plans to implement cost-cutting measures amounting to over $2 billion over the next three years.

In the earnings call on Thursday, finance chief Matthew Friend stated that the new outlook reflects increased challenges, particularly in Greater China and EMEA.

He also mentioned the softness in digital traffic and the negative impact of a stronger U.S. dollar on second-half reported revenue compared to 90 days ago.

TD Cowen analysts, in a note on Friday, downgraded Nike’s stock to market perform from outperform, stating that the company needs to improve its marketing efforts beyond basketball, streetwear, and lifestyle trends.

They also highlighted that innovation at the higher end of Nike’s assortment is not resonating at scale, and the company is facing disruption from smaller competitors in footwear and apparel.

On the other hand, Goldman Sachs analysts maintained their buy rating on Nike’s stock.

However, they acknowledged that the company’s report has provided enough evidence for concerns, with slowing growth momentum due to a tougher macro environment.

This points to a more competitive marketplace, and the company’s focus on key franchise life cycle management is expected to impact sales momentum in the future.

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