STORY: Shares of Nike hit two-and-a-half year lows on Friday after it warned of a margin squeeze from widespread markdowns amid a strengthening dollar and ballooning inventory.
$17 billion in value was wiped from the company early in the session – a loss that, if held through the market close, would mark Nike's biggest one-day percentage fall since March of 2020.
The world’s largest sportswear maker gets more than half its revenue from outside North America.
With a soaring dollar, Nike estimates it will take a $4 billion hit to its annual revenue – double what it had previously projected.
Nike’s gloomy outlook comes at a time when retailers are struggling with a slump in demand amid higher inflation, likely leading to more margin pain in the coming months as companies ramp up discounts to move excess inventory.
A chilling effect rippled through Nike’s competitors, with shares of Under Armour, Adidas, Puma and Foot Locker all falling on the news.