Nike shares ticked downward on Tuesday after its quarterly sales failed to meet Wall Street’s expectations, another reminder about the pressure it faces from rival sportwear brands on a global scale.
Nike said quarterly revenue for the three-month period ending February 28 rose 5 per cent to $8.4bn, a whisker shy of the $8.47bn expected by analysts surveyed by Bloomberg. Following the miss — a reminder of the pressure that competitors like Adidas and Under Armour are putting on Nike’s position in the sportswear sector — the company’s shares fell more than 1 per cent in after-hours trading.
During the quarter, net income came in at $1.14bn, a 20 per cent increase from the same period a year earlier and above the $881m forecast by analysts. Diluted earnings per share also posted a solid beat over the 52.5 cents expected, increasing 24 per cent to 68 cents.
Nike chief executive and chairman Mark Parker credited its “diverse, global portfolio” for “another solid quarter of growth and profitability,” with an increase in apparel sales across Nike, as well as a more modest uptick in footwear sales, offsetting a drop-off in equipment sales. Revenues were up 7 per cent on a currency-neutral basis to $7.9bn, boosted by double-digit growth in western Europe, China and other emerging markets, as well as its sportswear and Jordan brand.
Nike’s once-dominant position in athletic footwear and apparel has been under increasing fire in recent years, as more companies attempt to elbow into its territory. Mr Parker said that the company was focused on delivering more innovation in terms of its performance and styles, as well as connecting more directly with customers through digital channels and membership platforms.
Over the past 12 months, Nike shares have fallen 9.7 per cent.