Nike stock sank more than 10% Friday after executives gave a weaker sales outlook for markets around the world and highlighted a major cost-cutting initiative.

The company said Thursday that it aims to cut $2 billion in costs over the next three years. It also gave a softer revenue outlook of about 1% growth for its current fiscal year, compared to a prior projection of mid-single digits.

Nike said it would cut jobs and expected sales to flag as consumer spending faltered. The earnings report dragged stocks of other apparel companies down, including Dick’s Sporting Goods (DKS), which fell 3%, and Lululemon (LULU), whose shares ticked down more than 1%.

In another sign that the narrative around the resilient consumer is fading, Nike CFO Matt Friend said during the earnings call that the weaker sales outlook follows “indications of more cautious consumer behavior around the world,” pointing to markets in China, Europe, the Middle East, and Africa.

Nike, a stock closely watched as part of the Dow 30 index, also announced plans to simplify its lineup, boost automation, and work harder to attract customers with new products.

For the company's fiscal second quarter ended Nov. 30, revenue rose 1% from the prior year. Gross margin rose to 44.6% from 42.9% a year ago.

“While we appreciate the attention to margin, uninspiring topline trends are concerning and suggestive of insufficient newness and innovation,” said Jim Duffy, a research analyst at Stifel, in a note on Thursday after earnings. Duffy and his colleagues said that external factors such as weakness in China explain some of the gap in lower revenue projections, but that the fading growth in digital sales "is challenging CEO John Donahoe’s credibility with investors."

Despite the harsh market reaction, some experts see an investment opportunity.

Bernstein analyst Aneesha Sherman is maintaining her bullish stance on the company, telling Yahoo Finance Live that broader economic challenges don't signal weakness in the Nike brand, but rather reflect difficulties that many other companies are facing. In her view, Nike can still rebound out of a tough market.

Sherman said she is optimistic about Nike investing in women's categories, in Jordans, and in a big innovation cycle to gain share. "These changes will take time," she said. "But I think over a medium-term time horizon I think we should see them reaccelerate growth."

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on Twitter @hshaban.

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