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Shares in the world’s top sportswear companies slumped on Friday after apparel giant Nike lowered its sales forecasts, warning of a drop in consumer spending, and outlined plans to make $2 billion worth of cost savings over the next three years.

and JD Sports Fashion
shares all fell on Friday morning after shares in Nike
tumbled 12% during Thursday’s after hours trading session, following publication of its fourth-quarter results.

Adidas shares fell 6% on Friday having increased by 46% over the previous year. Puma shares dropped 5% having fallen by 7% over the past 12 months. JD Sports shares fell 5% having risen 39% over the past year.

The share price drops followed Nike’s decision to lower its guidance for the year ending in May, due to an anticipated drop in consumer spending which threatens to hit the sportswear sector’s revenues.

Nike said it now expects its full-year revenues to grow by just 1%, compared to its previous guidance for mid-single digit growth.

In an earnings call on Thursday, Nike CFO Matt Friend explained the company is “seeing indications of more cautious consumer behavior around the world in an uneven macro environment.”

Nike noted retail sales fell short of expectations in the second quarter, particularly in relation to Nike’s online retail business. The Nike CFO also warned macroeconomic headwinds, particularly in the Greater China and Europe, Middle East and Africa regions, are likely to impact the sportswear company’s sales in the coming quarter.

Nike said that while sales were “incredibly strong” during major consumer moments, including its strongest Black Friday ever, sales were softer than in prior quarters in periods in between those major moments.

In response, Nike also outlined plans to make $2 billion worth of cost savings, including by increasing automation and cutting staff, over the next three years. The Beaverton, Oregon headquartered company has reportedly already begun laying off staff, according to local newspaper The Oregonian.

Nike’s lower forecast signal hard times for sportswear industry as downturns in the world’s major economies are expected to hit consumer spending.

Analysts at Citi led by Monique Pollard, however, said that Adidas may be less impacted than its rival Nike, due to the Germany company’s greater focus on more resilient wholesale markets, over more unpredictable direct-to-customer sales.

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