Nike Says It Will Cut $2 Billion In Costs In A Major Warning For Consumers

Nike, a leading indicator of the global economy, issued a cautionary note on Thursday, citing consumer caution.

Nike lowered its sales forecast for the year and announced cost cuts amid rising concerns that consumer spending is declining globally. The firm expects to save up to $2 billion in costs over the next three years, involving layoffs.

Nike (NKE) shares fell as much as 14% on Friday.

Customers are changing their behavior, preceding discretionary purchases such as pricey footwear and athletic apparel in favor of necessities and experiences such as concerts and trips. Nike is also facing stiff competition from newcomers like Hoka and On Cloud.

Nike Says It Will Cut $2 Billion In Costs In A Major Warning For Consumers

On a conference call Thursday, Nike finance head Matt Friend said that the updated estimate reflects “indications of more cautious consumer behavior around the world.” He cited slow sales in China and the company’s sectors in Europe, the Middle East, and Africa.

Nike observed lackluster demand Outside crucial holiday events such as back-to-school shopping and Black Friday. The company’s e-commerce sales stalled, and competitors provided higher amounts of advertising to tempt customers.

While concerns about a US recession have subsided, European economies are stagnating.

Nike Says It Will Cut $2 Billion In Costs In A Major Warning For Consumers

China, the world’s second-largest economy, is also experiencing growing difficulties, with sluggish consumption being a major drag.

Nike is a multinational corporation known for its athletic footwear, apparel, and equipment. The company was founded in 1964 and has since become a major player in the sports industry.

Nike’s products are popular worldwide and are associated with high-quality performance and style. The brand has a strong presence in various sports, including basketball, running, and soccer, and has collaborated with numerous athletes and celebrities.

Nike Says It Will Cut $2 Billion In Costs In A Major Warning For Consumers

With its innovative designs and marketing strategies, Nike continues to be a dominant force in the global sports market.’

SOURCE (CNN)