# Nike shares plunge as company cuts revenue outlook
Nike shares saw a significant drop on Friday after the athletic apparel maker announced a cut in its revenue outlook for the fiscal year. This news also affected sneaker retailer Foot Locker, which heavily relies on Nike products in its stores.
## Nike’s revenue growth expectations revised
In its earnings report on Thursday, Nike stated that it now expects its revenue to grow by only 1% for the fiscal year, down from the previous outlook of mid-single digit growth. The company also announced plans to cut costs by over $2 billion in the next three years.
The revised outlook is attributed to increased headwinds, particularly in Greater China and EMEA, according to Nike’s finance chief Matthew Friend. He also mentioned factors such as softness in digital traffic and the negative impact of a stronger U.S. dollar on reported revenue in the second half of the year.
## Analysts’ opinions on Nike
TD Cowen analysts expressed concerns about Nike’s marketing strategy and downgraded the stock to “market perform” from “outperform.” They believe that the company needs to improve its marketing efforts beyond basketball, streetwear, and lifestyle trends. Additionally, they noted that Nike 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. They acknowledged the challenges highlighted in the company’s report but also emphasized the potential for sales momentum going forward.
## Conclusion
Nike’s decision to revise its revenue outlook has had a significant impact on its stock price. While some analysts have expressed concerns about the company’s marketing and competition, others remain optimistic about its future prospects. It will be interesting to see how Nike navigates these challenges and adapts its strategies to regain growth momentum.
*Note: This article includes contributions from CNBC’s Gabrielle Fonrouge and Michael Bloom.*
