Nike (NKE) shares plummeted 8.89% in pre-market trading on Friday, following the company's fiscal third-quarter earnings report and disappointing fourth-quarter outlook. Despite beating expectations for Q3, Nike's cautious stance on its ongoing turnaround efforts and the impact of new tariffs sparked a sell-off.

The sportswear giant reported fiscal Q3 earnings of $0.54 per share, surpassing analyst estimates of $0.29. Revenue came in at $11.27 billion, exceeding expectations of $11.01 billion. However, this still represented a 9% decline compared to the same period last year, highlighting the company's ongoing struggles.

The primary driver of Friday's pre-market plunge was Nike's gloomy forecast for its fiscal fourth quarter. Chief Financial Officer Matthew Friend stated that the company expects Q4 revenue to be down in the "mid-teens" range, which is worse than the 12% decline analysts had anticipated. Additionally, Nike projects Q4 gross margins to decline by about 400 to 500 basis points, signaling ongoing challenges in the company's turnaround strategy.

Nike is grappling with several headwinds, including inventory management issues, competitive pressures from trendy rivals, and the potential impact of tariffs on imports from China and Mexico. The company is in the early stages of a turnaround plan under new CEO Elliott Hill, who acknowledged the difficulties, stating, "While we met the expectations we set, we're not satisfied with our overall results."

In response to the earnings report and guidance, several analysts cut their price targets for Nike stock. JPMorgan lowered its target to $64 from $73, while TD Cowen reduced its target to $65 from $75. The downgrades reflect growing concerns about Nike's ability to navigate the challenging retail environment and execute its turnaround strategy effectively.

As Nike continues its efforts to clean up inventory, strengthen relationships with key retailers, and introduce new products, investors will be closely watching how the company navigates these challenges in the coming quarters. The stark contrast between Nike's Q3 performance and its Q4 guidance highlights the ongoing hurdles the company faces as it works to regain market share and adapt to a highly competitive landscape.