Shares of Nike sank 11% on Friday, the biggest laggard on the Dow today!
That happen after the company said it had too much inventory and not enough consumer demand.
Inventories rose 44% to $9.7 billion in the latest quarter, and higher discounts and freight costs squeezed profit margins, the consumer giant reported.
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Nike Stock drops amid Inventory and inflation woes!
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Nike plans to mark down more products into the holiday season, executives said.
Nike also highlighted how a strong U.S. dollar is expected to weigh on earnings.
When other currencies weaken against the dollar, that makes U.S. products less affordable abroad, cutting into international sales and hurting profits for multinational corporations.
“Headwinds from foreign exchange have also shifted significantly in the last 90 days, as the trend of U.S. dollar strengthening has accelerated,” Matthew Friend, CFO of Nike said on the company’s earnings call.
Nike estimates foreign exchange will have a negative impact on reported revenue and earnings before interest and taxes of approximately $4 billion and $900 million, respectively.