The strong dollar and discounts are squeezing Nike's profits.
The sportswear giant, which makes over half of its revenue outside of North America, doubled how much it thought the dollar would hit its revenue.
The firm's inventories increased more than 40%.
Nike's shares fell after the announcement.
Matthew Friend, Nike's finance chief, said that "Headwinds from foreign exchange shifted significantly in the last 90 days."
The company's net income fell 22% in the three months to the end of August compared to the year before.
Increased transport cots and higher markdowns have hit profit margins.
The amount of goods in transit increased due to supply chain issues, as inventories rose by 44%.
The company reported that it had revenues of $12.7 billion for the period, which was better than the Wall Street predictions.
The cost-of-living crisis has led to shoppers cutting back on spending, which has slowed demand for Nike's brands.
Hianyang Chan from Euromonitor International said that higher inflation is driving up costs and reducing margins.
Major US retailers, like Target, have offered heavy discounts as their inventories have risen recently.
There are rare and exotic footwear at the festival.
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