Mar 23, 2016
Nike's revenue misses as strong dollar weighs
Mar 23, 2016
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 10 percent at the end of the third quarter, while analysts were expecting a 11.6 percent growth, according to Consensus Metrix.
The company's shares fell as much as 6 percent 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 percent 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 percent to $879 million (618.3 million pounds). 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 percent 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 percent.
Net income rose 20 percent to $950 million, or 55 cents per share, in the third quarter ended Feb. 29.
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 percent at $61.50 in extended trading on Tuesday. They have risen 27 percent over the past 12 months.
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