Nike’s latest quarter miss and cautious full-year outlook sent Lululemon, On, Under Armour, and Deckers Outdoor shares lower in Friday premarket trading.
Shares of the sportswear giant itself fell nearly 10% before the open after results and guidance that undershot Wall Street expectations, and the warning rippled across rival names. Yahoo Finance reported premarket declines in Lululemon, On, Under Armour, and Hoka maker Deckers Outdoor as investors priced in a tougher stretch for athletic apparel and footwear.
Nike closed at $33.87 on October 2, down $1.28, or 3.64%, after the report. Prior to the release, the stock had already fallen 76% over the past five years. Management also signaled a fresh round of major layoffs still ahead.
The core problem sits in Nike Sportswear, still nearly half the business, and in leftover inventory that is forcing discounts and cutting into future orders. That is a marketplace story first: product that did not sell, channels stuffed with aged goods, and a China and Converse slide that left little cover.
CEO Elliott Hill told analysts Nike Sportswear, which made up just under half of the quarter’s revenue, was down low double digits. He framed the drop as a mix of choices the company made on purpose, products that underperformed, and pressure across the broader market.
Hill said on the earnings call:
"Nike Sportswear, which accounted for just under half of this quarter's revenue, was down low double digits,"
He went further on the mechanics. Nike cut Dunk revenue by nearly 50% in the quarter on purpose, creating roughly a $200 million headwind in sportswear. Aged, higher-volume sportswear footwear also sold through below expectations. That shortfall has already damaged future order books as Nike works with wholesale partners to clear excess stock and restore a healthier channel.
Hill put it this way:
"The decline reflected a combination of deliberate actions, product underperformance, and broader marketplace pressure. The first factor was one we expected. As planned, we reduced revenue from the Dunk by nearly 50% in the quarter. That resulted in roughly $200 million headwind in sportswear. In addition, some aged, higher-volume sportswear footwear sold through below expectations. Looking ahead, that has impacted our future order books as we proactively work with our wholesale partners to work through excess inventory to create a healthy marketplace."
In plain terms, Nike is discounting slow-moving product and asking retailers to help bleed out the overhang. That clears shelves over time. It also pressures margins and order flow while the cleanup runs.
Nike Brand sales fell 4% in the quarter. Online sales dropped 13%. Converse sales fell 28%. China sales fell 26%. Those figures leave little room for a soft landing narrative in the near term.
Full-year earnings guidance came in well below analyst estimates. Hill’s message on sportswear pointed to a weak market that he expects to persist in the medium term while the company works through inventory and resets the channel.
When a category leader posts declines that wide across brand, digital, a major subsidiary, and a key international market, peer stocks often move in sympathy. Lululemon, On, Under Armour, and Deckers are not Nike. Investors still treated the print as a read-through on demand, promotions, and wholesale caution across athletic retail.
Stifel analyst Peter McGoldrick was blunt on valuation after the guide. He said the firm is not ready to declare a floor while the shares trade at 28 times earnings at the midpoint of Nike’s FY27 estimates.
McGoldrick said:
"We are not ready to call a bottom yet with shares trading at 28x P/E at the midpoint of FY27E guidance,"
That stance matches the tape. A multi-year 76% drawdown, a fresh premarket slide near 10%, guidance below the Street, and a layoff round still to come are not the markers of a cleaned-up story. They are markers of a turnaround that still has to prove sell-through, not just inventory plans on a call.
Lululemon, On, Under Armour, and Deckers Outdoor all dropped in Friday premarket trading after Nike’s warning. None of those companies issued the quarter. The market still marked them down on the same morning.
That is how equity markets handle a leader’s miss in a shared category. Buyers pull back on the group until someone shows cleaner demand. Hoka’s parent, premium run specialist On, yoga-and-train giant Lululemon, and Under Armour all sit close enough in the consumer’s athletic wallet that a Nike inventory flush and China slide raised the same questions about traffic, full-price selling, and wholesale caution.
Nike did not publish granular premarket percentages for each rival in the account of the move. The direction was uniform: down, together, before the open. Nike’s own regular-session close later settled at a 3.64% decline.
Beyond the revenue cuts and the Dunk reset, Nike signaled another major round of job cuts. Timing, scale, and locations were not spelled out in the report. The signal alone adds a second track to the story: less product that is not working, and fewer roles tied to a smaller, tighter operation.
Companies take that path when promotions and channel cleanup are not enough on their own. Shareholders hear it as cost discipline. Workers hear it as the bill for years of product and inventory bets that did not clear at full price.
Hill’s own checklist was deliberate volume cuts on Dunk, aged footwear that missed sell-through targets, order books already hit, and partners helping move excess stock. Pair that with a 28% Converse drop and a 26% China drop, and the layoff warning fits the same cleanup cycle rather than a surprise bolt-on.
Consumers, not brand ads, decide when athletic shelves are healthy again. Nike is cutting iconic Dunk volume nearly in half, discounting what aged out, and telling wholesale to help clear the pipe. Peers got marked down anyway. In a real market, bad inventory and weak sell-through still extract a price, on the stock, on the payroll, and on anyone who assumed the category was immune.