Nike shares tumble 10% as unwanted sports goods erode profit outlook

The retailer has downgraded its outlook for the full year

Nike now sees gross margin falling 200 to 250 basis points this fiscal year — versus a previous forecast that the gauge of profitability would be flat or decline as much as 50 basis points.

Nike shares tumbled the most since the early days of the pandemic after a glut of unwanted merchandise eroded the sportswear giant’s profitability.

North American stocks of goods surged 65% in its financial first quarter to the end of August, and resulting markdowns caused gross margin to miss analysts' expectations. The retailer also cited higher freight costs and foreign-exchange effects in its earnings report, and downgraded its outlook for the full year.