No slam dunk for Nike's growth, orders
NIKE'S quarterly revenue growth and its forecast for future orders missed analysts' estimates, underscoring the sportswear maker's struggle to fend off competition from adidas and others, especially in its home turf of North America.
Its shares, already the third worst performer on the Dow Jones Industrial Average with a 15 per cent drop this year through Tuesday, fell 4.2 per cent to US$50.85 in extended trading.
While Nike still dominates in North America, its biggest market, analysts have said it is losing ground to Germany's adidas. Smaller domestic rivals such as Under Armour are also making inroads.
"You are seeing more people moving towards adidas," Edward Jones analyst Brian Yarbrough said.
He noted that adidas was "making a comeback" and some United States retailers were giving more shelf space to Nike's competition.
Nike's revenue - in the fourth quarter ending May 31 - was hurt by a strong US dollar that ate into overseas sales.
Clearing excess inventory in North America also hurt sales and margins, Nike said.
While it noted the volatility in the currency markets after Britain's shock vote to leave the European Union, it maintained its full-year sales growth forecast.
Nike expects revenue to grow in the high single digits for the year ending May 2017.
Adidas, by contrast, expects its full-year currency-adjusted sales to grow 10-12 per cent, thanks in part to a busy sporting calendar that includes the Rio Olympics and the European soccer championship.
Slipping demand for its basketball shoes has hit Nike's "future orders", Mr Yarbrough said. The success of Under Armour's basketball shoes endorsed by NBA star Stephen Curry has eaten into demand for Nike's.