Nike Shares Fall As Future Orders Miss Estimates

Nike Inc. (NIKE: NKE) Tuesday posted quarterly sales and profits that top estimates, while future orders fell short of estimates, raising concerns about the company’s future growth.

The shares fell 1.5 percent to $54.52 in the early trading on Wednesday. The stock had been down 11 percent this year to Tuesday’s close, the worst performer on the Dow Jones Industrial Average.

Future orders,a key indicator of demand for the brand’s sneakers and apparel, rose just 1 percent in the fiscal first quarter, compared with 14 percent growth a year earlier. Analysts had projected a 5 percent growth.

“Futures orders continue to be an important and valuable aspect of our operating model. That said, the relationship between reported futures and reported revenue in a given quarter has become less correlated” as the company sells more items directly to consumers, Mr. Campion said. ?

The company is facing strong competition from Adidas and Under Armour. Nike’s Jordan brand had been dominating the market for many years, but now it is losing some market shares to Under Armour in the basketball business. While Adidas is doing very well in the casual footwear category.

Revenue rose 7.7 percent to $9.06 billion, topping analysts’ estimates of $8.87 billion.

Net income rose 5.9 percent to $1.25 billion, or 73 cents a share, in the quarter ended Aug. 31. Analysts had projected profit of 56 cents per share. It was helped by a tax benefit. Nike’s effective tax rate was 2.5 percent, compared with more than 18 percent a year earlier.

“We’re excited about the pipeline of great products that we have coming,” Trevor Edwards, president of the Nike brand, said on a conference call. “The brand is as strong as ever.”

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