Mar 22, 2017
Nike reports lower-than-expected quarterly revenue, rivals gain ground
Mar 22, 2017
Nike Inc reported lower-than-expected quarterly revenue on Tuesday as the world's largest footwear maker battles for market share in North America with a resurgent Adidas AG and a fast-growing Under Armour Inc.
Shares of the Dow component were down 1.2 percent at $57.31 in after-market trading on Tuesday.
Nike and its Jordan brand have been dominant in the U.S. footwear market for years, but Adidas and Under Armour have gained ground by revamping their brands and tying up with supermarket chains.
Nike has lost basketball sales to Under Armour since its rival poached the NBA's Golden State Warriors star Stephen Curry in 2013.
Germany's Adidas has also been successful in its efforts to muscle back into the U.S. market, with fashion shoes made popular by collaborations with celebrities such as Kanye West, Pharrell Williams and Rita Ora.
Nike's sales in North America, its biggest market, rose 3 percent in the quarter ended Feb. 28.
Sales in Greater China were up 9 percent in the quarter, falling short of double-digit growth for the first time in at least nine quarters.
However, excluding the impact of currency moves, sales in the Greater China region jumped 15 percent.
Nike was criticized at China's annual consumer rights day television show, where it was said to have mislead consumers over high-tech air cushions in some of its "Hyperdunk" basketball shoes.
Gross margin contracted 140 basis points to 44.5 percent during the quarter, hurt by a strong dollar and more off-price sales.
Nike's net income rose to $1.14 billion, or 68 cents per share, in the third quarter ended Feb. 28, from $950 million, or 55 cents per share, a year earlier.
Analysts on average had expected earnings of 53 cents per share.
Revenue climbed 5 percent to $8.43 billion in the quarter, compared with the average estimate of $8.47 billion, according to Thomson Reuters I/B/E/S.
Excluding currency fluctuations, third-quarter revenue rose about 7 percent.
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