Nike shares are down nearly 10% in pre-market trading in New York after the struggling athletic footwear and apparel company warned its sales slump will deepen and unveiled a restructuring that will eliminate jobs.
As of Thursday's close, year-to-date performance had been absolutely abysmal, with shares down 45%. The extended decline could now put the stock on track for its worst annual loss on record.
The decline follows the sportswear giant's earnings release after hours on Thursday, when it stated that it now expects revenue to decline by a high-single-digit percentage this fiscal year, substantially worse than the 2.4% drop analysts tracked by Bloomberg forecast.
Nike spent years catering to woke culture while neglecting to stay ahead of the industry as competitors ate into its market share. It now plans to fold its Greater China unit into its broader Asia Pacific division and combine Latin America with North America.
This restructuring is expected to deliver $2.5 billion in savings over five years while generating roughly $1 billion in pretax charges.
CEO Elliott Hill wrote in a memo to investors that this restructuring "will require fewer roles over time."
Hill, approaching his third year as CEO, has focused on rebuilding retail relationships and organizing Nike around individual sports.
The ugly guidance on Thursday comes after BofA retail analyst Lorraine Hutchinson downgraded the stock last week and warned that its "turnaround is taking longer" than expected.
UBS retail analyst Jay Sole wrote in a note shortly after earnings about "why it's still not time to buy Nike" and maintained a "Neutral" rating on the stock, lowering his 12-month price target to $34 from $4
