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STORY: Nike shares plunged over 12% in after-hours trade Thursday, following a surprise warning on sales.

The sportswear giant forecast a fall in revenue for the fiscal year.

It’s predicting a drop in the mid single digits range, when analysts had expected a modest rise.

Fourth quarter revenue also dropped, and missed targets.

Nike faced headwinds including weak international demand.

It also faces growing competition from upstart brands like On and Hoka, which are seen as more fashionable.

Speaking to analysts after the results, Chief Financial Officer Matthew Friend said there were signs too that cost-conscious consumers are growing more cautious about spending.

Nike is planning a new range of lower-priced footwear in response.

Now the firm hopes the Olympics will help it win back some market share.

Ahead of the event, it’s touting its roots in competitive sport.

Nike says it’s spending more on this year’s Games than any previous one.

It’s also been pouring money into developing new running shoes, including an update of its popular Air Max line.