Nike (NKE -2.93%) The stock lost ground in Wednesday trading. The shoe and clothing company’s share price ended the day down 2.9 percent, according to data from S&P Global Market Intelligence.

Nike shares recorded another day of decline due to information in Foot LockerSecond quarter report and conference call. While Foot Locker actually beat sales and earnings expectations in the second quarter, the retailer announced actions for 2025 that suggest headwinds for Nike.

Foot Locker’s store closure plans could be a bad omen for Nike

Foot Locker actually managed to deliver some positive surprises with its quarterly report. Although the company reported a non-GAAP (adjusted) loss of $0.05 per share for the quarter, the performance beat the average analyst estimate of an adjusted loss of $0.07 per share.

The company also returned to year-over-year sales growth. Revenue rose 1.9% year-over-year to $1.9 billion, beating Wall Street’s average revenue forecast of $1.89 billion. Comparable-store sales rose 2.6% year-over-year during the same period, beating the average analyst forecast for category growth of 1%.

However, while Foot Locker beat its sales and profit forecasts, the company announced plans to significantly reduce the number of its stores in some Asian and European markets. This is not a promising development for Nike, and the stock has fallen about 24% since the beginning of the year.

Has this made Nike’s path to a comeback more difficult?

Nike shocked the stock market in June when it released forecasts that said the company would see a significant decline in sales this fiscal year. The company forecast a sales decline of about 10% for the fiscal first quarter – a period that ends later this month – and forecast a mid-single-digit sales decline for the full year 2025. Now Foot Locker could be sending another pessimistic signal.

With its Q2 report, Foot Locker announced that it plans to close its stores and e-commerce operations in South Korea, Denmark, Norway and Sweden. The company expects to close 140 stores in Asia and 629 stores in Europe by the middle of next year.

Nike has prioritized its own e-commerce platforms and other direct-to-consumer channels, but Foot Locker remains a key retail partner for the company. The footwear and apparel giant is under pressure from smaller competitors, including When holding and Brooks, as well as the changing landscape in footwear retail, could cause the industry giant to continue to lose attention and market share.