On Wednesday during afterhours, Nike Inc. (NYSE: NKE) posted quarterly sales that missed analysts’ estimates. The sluggish sales cause concerns about the slowdown of the world’s largest sports company.
Beaverton, Oregon-based Company posted a profit of $846 million for the quarter ended May 31, down from $865 million a year earlier. Earning for the period was 49 cents a share, slightly topping analysts’ estimate of 48 cents per share.
Quarterly revenue rose 6 percent to $8.24 billion, missing analysts’ forecast of $8.28 billion.
The future orders, a key indicator of demand, increased 8 percent on a global basis. Excluding currency fluctuations, the future orders rose 11 percent, but the number still falls short of analysts’ expectations of 13 percent. Future order is a benchmark for investors to forecast the demand of Nike products.
The athletic gear giant’s years of robust growth stalled in the latest quarter as the company is facing challenges from different aspects. In one hand, sales overseas are hurt by the strong U.S. dollar and dollar may keep appreciating if Janet Yellen announces more rate hike this year. On the other hand, Nike is facing increased competition from its rivals. Under Armour, which has an endorsement deal with NBA super star Stephen Curry, is taking market share from Nike in the basketball shoes segment. Nike also loses market shares to Adidas AG in the casual and fashion categories.
“Other brands are providing solid competition across multiple categories and I feel that is having an effect on the Nike numbers domestically,” said Neil Schwartz, vice president of business development for industry tracker SportsOneSource. “Adidas came out of nowhere in the classics and casual athletic categories.”