Nike shares closed at 46 1/8, up 1 5/8, but were down slightly in after-hours trading. It's unclear how badly the stock will be hit Thursday, given the resilience of stocks that have been warning lately as well as the fact that Nike holders are used to bad news.
Another warning sign that Nike's business has yet to bottom were cautionary notes about Europe, which has been one of the company's stronger markets as business in the U.S. and Asia have stalled.
"Europe is mixed," said Tom Clarke, Nike's president and chief operating officer, on a conference call open to the news media. "Footwear momentum has slowed. We're taking measures to guard against an inventory buildup" similar to what Nike saw in the U.S. and Asia, though he declined to specify what those measures are. He added that Nike expects the World Cup soccer games, to be held in France this summer, will boost footwear demand in Europe.
As for the ticklish inventory problem, which has backed up at least 2 million pairs of sneakers in Japan alone -- a fact that caused one money manager to gasp, "Oh my god" during the call -- Nike's management promised to clear its inventories in the near future.