Nike Reports Sluggish North American Sales
June 28 2016 - 5:50PM
Dow Jones News
Nike Inc. said its revenue rose 6% in the latest quarter as the
athletic gear giant's growth in most of its international markets
offset sluggish sales in its North American business.
Shares of the Beaverton, Ore., company slid 6.7% to $49.51 in
after-hours trading as revenue missed expectations and the company
reported slower growth in its future orders, excluding currency
impacts. Before Tuesday's results, the stock had fallen 15% in
2016.
For the period ended May 31, Nike's revenue rose to $8.24
billion from $7.78 billion a year earlier. Analysts polled by
Thomson Reuters expected revenue of $8.28 billion. Excluding
currency fluctuations, revenue improved by 9%.
The world's largest sportswear maker by revenue reported that
its sales in North America edged up 0.1% to $3.74 billion.
In all, Nike reported a profit of $846 million, down from $865
million a year earlier. On a per-share basis, earnings were flat at
49 cents amid fewer shares outstanding. Analysts expected per-share
profit of 48 cents.
Nike said futures orders, which reflect products scheduled for
delivery from June through November, rose 8% on a global basis,
compared with an increase of 2% a year earlier and the 12% growth
logged for the previous quarter. Futures orders are closely watched
by investors as a benchmark for demand for Nike products.
Excluding currency impacts, futures orders increased 11%,
compared with a rise of 13% a year earlier and an increase of 17%
in the previous quarter.
In its North America business, future orders improved 6%,
compared with growth of 13% a year earlier and an increase of 10%
in the previous quarter.
Gross margin fell to 45.9% from 46.2%.
Nike has used expensive sponsorships to increase its market
share in sports such as soccer and basketball. In the latest
period, Nike increased such spending—called demand creation—by 6.6%
to $873 million.
For the 12 months ended May 31, excluding currency rates, Nike
reported running-category sales rose 10%. Jordan-brand
basketball-related sales climbed 21%, and Nike-brand
basketball-related sales rose 2%.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
June 28, 2016 17:35 ET (21:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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