Shares of (NYSE: NKE) retreated 5.7% during the first six months of 2023, according to S&P Global Market Intelligence. The bellwether consumer stock got crushed by surprisingly bad earnings from an industry peer, and Nike's lukewarm outlook for the full year confirmed that uncertainty lies ahead.

Nike stock bounced around for most of the year, but it suffered a significant drop in May. There wasn't any news specifically about Nike in that month, but Foot Locker (NYSE: FL) posted some worrisome results that dragged on adjacent stocks. Foot Locker surprised Wall Street by reporting an 11% drop in sales and reducing its guidance for the full year. The athletic apparel retailer had performed favorably in the holiday season, so the May news blindsided some investors.

This sparked concerns that rippled throughout the consumer sector. As one of Foot Locker's largest suppliers, Nike's outlook fell under scrutiny. It's a case of "where there's smoke, there's fire." While Nike's decline wasn't nearly as sharp as Foot Locker's, the ominous news was still enough to wipe out all of Nike's gains from January through April.

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Source Fool.com