Nike is planning billions in savings - consequences for the financial market and competitors

Nike is planning billions in savings - consequences for the financial market and competitors

According to a report by www.faz.net, US sporting goods manufacturer Nike plans to save $2 billion over the next three years. This will be achieved through automation, a new organization of their brands and job cuts. The balance sheet for the past quarter through the end of November showed sales of $13.39 billion, an increase of one percent compared to the previous year. Quarterly profit also rose 19 percent to $1.58 billion. Nevertheless, Nike expects business to be weak in the coming months and has therefore adjusted its growth forecasts. Revenues are expected to increase again in the fourth quarter of the financial year, but only by a low single-digit percentage. As a result, Nike shares fell almost 12 percent in after-hours trading in New York, dragging down shares of Adidas and Puma in Germany as well.

Nike's statements have disappointed market analysts and investors, which also has an impact on the stock prices of its competitors. Adidas shares, one of the DAX bottom performers, lost around six percent, and Puma, the weakest MDAX stock, also lost a similar amount. The bad news from Nike also puts a strain on its competitors.

JPMorgan's Matthew Boss noted that Nike expects 2024 sales to grow just 1 percent, compared to the consensus estimate of 3.7 percent. The company is facing headwinds from the economy in China and also in the Europe, Middle East and Africa region. Sales via digital sales channels are characterized by price discounts and purchase incentives.

Nike's planned measures can therefore have a major impact not only on the company itself, but also on its competitors in the sporting goods industry. The difficulties in important sales regions such as North America and China will pose challenges for the entire industry.