Proactive Investors - Is the great Nike Inc (NYSE:NKE) running out of steam? The latest results from the king of trainers suggest it is flagging a little faced with headwinds such as slowing sales growth in China.
After hours in the US, the shares fell around 7% in a yo-yo trading session. Initially, up 5% on a better-than-expected 77 cents of holiday quarter earnings, the stock hit reverse gear when management provided a rather downbeat assessment of near-term and longer-term trading trends.
The driver was the subdued global economic climate and shifting consumer spending on discretionary items.
The company projects slight revenue growth in the near term and has not specified the expected growth rate for fiscal 2025, against analysts' predictions of a 5.6% increase.
Amid these projections, Nike is focusing on efficiency and cost reduction, including a workforce reduction of 2% and a $2 billion cost-saving plan over three years, as it navigates a more competitive market and aims to maintain its leadership in the sneaker and apparel industry.