Nike's Outlook Cools as the Competition Heats Up -- WSJ

By Sara Germano 

Nike Inc. gave a tepid outlook for sales growth even as it posted a jump in quarterly profit, as the company faces stiffer competition and a changing retail landscape.

The world's largest sportswear maker said it expects to tighten the supply of products it releases in North America, the largest sporting-goods market. Sales in its home market rose 3% in the quarter ended Feb. 28.

Nike's world-wide futures orders, largely a gauge of wholesale orders scheduled to ship in the next six months, fell 4%, and the company forecast mid-single-digit sales growth for its current quarter, slightly below results reported Tuesday.

Nike executives said the shift to online shopping has made traditional brick-and-mortar retailing more difficult. "It's driving a more promotional environment in the near term," Chief Executive Mark Parker said on a conference call.

Mr. Parker emphasized the company's ongoing efforts to improve sales directly to consumers, create and ship products more efficiently, and develop more technologically advanced products.

Shares of Nike, which have fallen 9.8% this year, declined 4% in post-market trading to $55.65.

The company is facing competition from a resurgent Adidas AG, the German sportswear maker which earlier this month reported stronger sales growth and profitability, in part due to refocusing its efforts on the key North American market.

Nike's results were also hurt by a stronger U.S. dollar, and the company anticipates that currency exchange rates will weigh on results through the end of its next fiscal year.

Nike reported Tuesday a quarterly profit of $1.14 billion, or 68 cents a share, up from $950 million, or 55 cents a share, a year earlier. Revenue increased 5% to $8.43 billion, falling short of the $8.47 billion analysts expected. Excluding currency fluctuations, revenue rose 7%.

--Ezequiel Minaya contributed to this article.

Write to Sara Germano at [e-mail]

(END) Dow Jones Newswires

March 22, 2017 02:47 ET (06:47 GMT)

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