Nike says it will reduce expenses by $2 billion

Nike, a leading indicator of the state of the world economy, issued a cautionary note on Thursday citing a rise in prudence among customers.

Nike announced cost reductions and lowered its revenue projection for the year in response to mounting worries that global consumer spending is slowing down. The business stated that it plans to reduce costs by up to $2 billion over the next three years, including through employee layoffs.

Nike (NKE) stock fell as much as 14% on Friday.

Consumers are changing the way they shop, choosing necessities and experiences like concerts and travel over luxuries like pricey sneakers and sports apparel. Newer companies like Hoka and On Cloud are fierce rivals for Nike.

In the company's conference call on Thursday, Nike Finance Chief Matt Friend stated that the revised outlook is based on "indications of more cautious consumer behavior around the world." He cited the company's segments in Europe, the Middle East, and Africa as well as the slow sales in China.