Nike, the world's largest footwear maker, reported quarterly revenue that missed analysts' estimates as a strong dollar hurt sales from some of its overseas markets.
The company’s orders for delivery from March through July in North America, a demand gauge it calls “futures orders”, also fell short of expectations, signaling a slowing pace of growth in its biggest market.
Futures orders in the region were up were up 10 per cent at the end of the third quarter, while analysts were expecting a 11.6 per cent growth, according to Consensus Metrix.
The company’s shares fell as much as 6 per cent in extended trading on Tuesday.
"Expectations were very high," Edward Jones analyst Brian Yarbrough said, adding that Nike had been "killing it" for a while.
The footwear maker said it expected full-year revenue to grow in the high single digits for the year ending May 2017. This was below the 10 per cent growth that analysts were expecting, according to Thomson Reuters I/B/E/S.
Sales of footwear, apparel and sports and athletic equipment in emerging markets fell 8 per cent to $879 million. Excluding currency fluctuations, sales in emerging markets rose 11 percent.
However, strong sales in China and North America more than made up for declines in emerging markets. Nike reported a 22.6 per cent rise in revenue from China, driven by strong demand for sportswear and running and basketball shoes.
The company also benefited from a spurt in demand during the Chinese New Year.
Nike’s popular running shoe brands such as Lunar, Free and Flyknit as well as basketball brands such as Jordan and LeBron helped drive North American sales, which rose 13 per cent.
Net income rose 20 per cent to $950 million, or 55 cents per share, in the third quarter ended February 29th.
Revenue rose 7.6 percent to $8.03 billion.
Analysts on average had expected earnings of 48 cents per share, on revenue of $8.20 billion, according to Thomson Reuters I/B/E/S.
The company’s shares were down 5.2 per cent at $61.50 in extended trading on Tuesday. They have risen 27 per cent over the past 12 months.
Reuters
