Nike, the maker of shoes and athletic wear that is now known amongst many conservatives more for its support of anthem-protesting former NFL pIayer Colin Kaepernick than the quality of its products, just saw a serious stock market reversal after bad sales news came in and the company indicated a huge round of cost-cutting layoffs is about to begin.
In fact, the woke sportswear giant’s stock cratered by an incredibIy nearly 12 percent in premarket trading before Friday, then ended up remaining down just under 11 percent for Friday, a brutally bad result headed into Christmas weekend. That drop caused, on its own, an 81 point drop in the Dow, though other companies Nike partners with, such as Foot Locker and Dick’s Sporting Goods, were also down by a few points on Friday.
The stock selloff came after news broke that Nike is predicting weak sales in the near future and that it is seeking to cut $2 billion in costs, about $450 million of which will come from severance payments to employees who will either be taking buyouts or otherwise cut from the company’s payrolls. Matt Fiend, Nike’s Chief Financial Officer, said that the costs will largely be borne in the third quarter.
Fiend did say that there is some good news for the company, however, saying, When we look at the level of inventory in our partners relative to their current level of retail sales, we feel good about the weeks of supply that we have there. We feel great that our partners are positioned to put our newest and most relevant product in front of the consumer.
Despite Fiend’s claim that things are looking positive, the sales data was decidedly more mixed. The overall result was somewhat disappointing, with Nike bringing in just $1.86 billion in sales, far short of the $1.95 billion that analysts predicted it would bring in in its second quarter. Further, though sales in the US and some Asian states were up enough to buoy sales, up about 1 percent year over year, sales were crushingly slow in China, Europe, the Middle East, and Africa.