Nike (NKE) announced late Thursday that it would lay off 1,600 people, about 2% of its workforce.
HOUSE OF JORDAN — But no longer Tiger Woods, who launched his own clothing line this week called Sunday Red (check out his shins in his comeback round of the Genesis Invitational yesterday) I want it. He blamed it on back spasms after the round presser ) — there were about 83,700 employees before this pink slip round.
CEO John Donahoe blamed the need to release investments in running, women's apparel and the aforementioned Jordan Brand. This is part of his new $2 billion restructuring plan over the next three years for the company. That means Nike will likely make more job cuts this year, next year, and in 2026.
It's interesting to see Nike investors yawning at the cost savings that could boost this profit. S&P 500 stocks are down 2.3% since the beginning of the year, while the S&P 500 index is up 5.5%. (It's down just 1% in pre-market trading.) I think this speaks to the real concern investors have about Nike right now: sales growth. prospects, particularly in the important Chinese market; Just look at the scenery!
Burger King China, owned by Restaurant Brands (QSR), reported disappointing results this week, prompting the company to withdraw investment from the country until the situation improves. This echoes what we've been hearing about China from other consumer companies like Levi's (LEVI) in recent weeks.
According to a Stifel memo I received this morning, one of the company's analysts met with P&G CEO John Mueller yesterday and there was considerable talk about China's weakness with the high-end SKII skincare product line. It is said that Nike gets about 15% of its annual sales. From China. If this country isn't doing well with Nike sales, don't worry, there will be a backlash in the US.
And it appears Nike's U.S. employees will have to pay the price for executives' failure to do their forecasting job accurately.
