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Nike has announced that it is set to make cost savings of $2bn (£1.57bn)across the next three years and has lowered its sales forecast.
This news caused the sportswear retailer’s stock price to drop over 11% in after hours trading yesterday.
The company expects a pre-tax charge of between $400m(£315m) and $450m (£354m) during the current quarter as a result of severance costs.
This move comes as Nike warned of weakening customer demand especially in Europe and China.
Executives from Nike stated that the company saw a bifurcation in the company’s Q2 performance.
The retailer saw strong performances around big holidays like Black Friday in North America and Singles Day in China, but weaker than expected for periods in between.
Matthew Friend, CFO, said: “We know that in an environment like this where the consumer is under pressure and there is a stronger promotional environment, it is newness that causes the consumer to act.”
