Shares in Nike, the athletic shoe and clothing giant, fell by 17% on Tuesday, after the company said it expected the slowdown in the United States economy to slice at least 24% from its third-quarter profits.

They were down $8.22 to $40.95 in early trading on the New York Stock Exchange.

On Monday, Nike said it now expected to earn about 34-38 cents a share in the three months to 28 February compared with earlier guidance to analysts of 50-55 cents earnings per share.

"We were anticipating a flat year-on-year third quarter largely because of weakness in our US footwear revenues," chairman and chief executive Philip Knight said.

Mr Knight also blamed a new planning and inventory system for the trouble saying it had resulted in "product shortages and excesses as well as late deliveries".

This helped reduce shoe sales by $80m-100m, the company said.

It estimated the problems may continue for six to nine months.

'Fixable'

Analysts said Nike was also suffering increased competition in the key US market from rivals Reebok and Adidas.

Sales of mid-price ($50-75) shoes had slowed although, said Mr Knight, this was "more fixable than any other ones in the company".

Mr Knight said Nike sales were still strong worldwide.

The company maintained its expectations of 60-65 cents earnings per share for the fourth quarter.

Nike shares dropped 15% in electronic trading after the market's official close to stand at $42 compared with the earlier closing price of $49.17.