Blaming cautious consumer spending, Nike lowered its annual sales forecast on Thursday and said it is planning to save $2 billion in costs over the next three years. According to a report by the news agency Reuters, the savings will be made by tightening the supply of some products, reducing management layers and increasing automation.
The report said that Nike's wholesale business has been under pressure amid fewer orders from retailers. The slowdown is evident in the online sales numbers as well. In a post-earnings call, the company said its revenue in the full year, ending May 2024, will be down by about 1 per cent
In the quarter ending November 30, Nike posted a total revenue of $13.39 billion, missing the estimates of $13.43 billion. Its per-share earnings of $1.03 topped estimates of 85 cents. Reports suggest this was due to lower freight costs and inventories.
According to the Financial Times (FT), the company is also worried about headwinds in the economies of China, Europe, West Asia, and Africa. Moreover, the company has witnessed healthy numbers on big consumer holidays like Black Friday, but on other days, the sales are slower than expected