Nike Inc. (NYSE: NKE) reported quarterly earning that beat profit projections for the 15th straight quarter. But shares still fall, as the growth didn’t meet investors’ high expectation.
Revenue rose 7.7 percent to $8.03 billion for the quarter ending Feb.29, which missed analysts’ estimates of $8.2 billion in the period, hurt by currency headwind. Although sales grow more slowly, profit beat estimates. The company posted diluted profit of 55 cents, 22 percent above the 45 cents in the previous. Analysts had a projection of 48 cents per share, according to consensus estimate from Thomson Reuters.
The data of sales and profits seem not bad, but futures orders are also one of key indicator for Nike. The sportswear giant said that futures orders in emerging markets and in North America, excluding currency changes, rose 14 percent and 10 percent, below analysts’ estimated of 16.1 percent and 11.6 percent. The slower growth raises concerns about the sales in the next quarter. However, its business in China is still booming, futures orders in Greater China were up 36 percent, above analysts’ projection of 22.3 percent.
“Expectations were high, so they have to nail it or blow it out -- and they didn’t,” said Brian Yarbrough, an analyst for Edward Jones. “Any hiccup can cause this kind of reaction in the stock.”
In addition to the slower growth, Nike is also facing more competition in the footwear industry. Some analysts said that Nike is losing market share to Under Armour and Adidas. According to the report from Morgan Stanley’s analyst, UA's U.S. basketball shoe sales have increased over 350 percent year-to-date. Its Stephen Curry signature shoe business is already bigger than those of LeBron, Kobe, and every other player except Michael Jordan. Also, Adidas is putting more resources into footwear.
Nike shares fell 3.73 percent to $62.50 at 12.04 p.m. in New York.