Nike ( NKE ) said late Thursday it would lay off 2% of its workforce, or 1,600 people.
The House of Jordan – but no longer Tiger Woods, who This week she launched her own clothing line called Sun Day Red (Look at his shank In his return round at the Genesis Invitational yesterday, he blamed back spasms on the pink round—pressure)—the pink slip round was about 83,700 employees ahead.
CEO John Donahoe lamented the need to free up investments in running, women's apparel and the aforementioned Jordan Brand. It's part of the company's new $2 billion restructuring plan over the next three years. So in other words, more layoffs could be coming from Nike this year, next year, and in 2026.
It's interesting to see Nike's investors yawn at these potentially margin-enhancing cost cuts. The stock is down 2.3% year to date, versus the S&P 500's 5.5% gain. (It was down a modest 1% in premarket trading.) Now it speaks to the real investor concern with Nike: the first-line growth outlook, especially in the important market of China. Just look at the landscape!
Restaurant Brands ( QSR )-owned Burger King China's results were subdued this week, and the company is holding back on investing in the country until conditions improve. That fits with what we've heard in China in recent weeks from other consumer companies like Levi's ( LEVI ).
According to a Stifel memo I got this morning, one of their analysts met with P&G CEO John Moeller yesterday and there was a good amount of talk about China's weakness with their high-end SKII skin care product line. Nike gets 15% of its annual sales. From China. If the country doesn't do well in terms of Nike's sales, there's sure to be a backlash on American shores.
Also, Nike's American workers may have to pay the price for their executives who didn't get the forecasting job right.
