“We always thought that Foot Locker’s position as a ‘strategic partner’ would insulate them somewhat from Nike’s DTC push… but this is a dramatic change,” said Wedbush analyst Tom Nikic.

“We don’t really see a silver lining here.”

Nike, battling supply chain issues and production facility closures over the last year, has been increasingly moving toward directly selling to consumers instead of wholesalers.

In its latest quarter, DTC sales rose to $4.7 billion, accounting for about 40% of Nike’s total sales.

“We still have access to all of those products. We’ll just see different quantities flowing our way,” Foot Locker’s Chief Executive Richard Johnson

Foot Locker has been leaning on other brands including AdidasPumaTimberland

The company said it expects comparable sales to fall 8% to 10% in fiscal 2022, while estimating adjusted profit between $4.25 and $4.60 per share. Analysts on average were expecting $6.49 per share, according to Refinitiv estimates.

Foot Locker’s shares were down 35% at $26.85 in afternoon trading. If the losses hold, the stock was set for its worst day ever.