Production Concerns Hit Nike Stock

Nike Inc. shares fell 8 percent amid concern the company will cut its sneaker production more than 20 percent starting next month.

Shares of the largest U.S. seller of athletic shoes fell 4-1/4 to 54-7/8 in trading of 13.5 million shares, making it the third-most-active stock on U.S. exchanges.

Nike told its plants in China and Indonesia to reduce footwear production from May to July, said a report by Smith Barney analyst Faye Landes. She said in the report that five unnamed people in China and Indonesia said they don’t believe the orders are being made up in other countries.

The move may indicate that U.S. demand for Nike’s shoes is slowing more than expected, Landes said. Factories in the two countries are Nike’s biggest suppliers, the report said. Landes downgraded Nike’s stock to “neutral” from “outperform.”

Nike spokesman Jim Small said the company is cutting excess capacity at non-exclusive factories. “This is simply an adjustment in planned capacity. This isn’t anything about the market slowing down or turning back orders,” he said.