Nike Q3 Profits Top Forecasts But Stock Dips On US Sales Miss

Shares for Nike Inc. are stumbling in after hours trading, down more than 3 percent to $85.20 as of 4:25 p.m. ET, after the firm posted third-quarter earnings that topped estimates and revenues that were in-line with forecasts.

Investors, who had been upbeat on the brand amid market watchers’ reports that the firm was regaining some market share in North America as Adidas slowed down from a period of blockbuster growth, were likely underwhelmed by the Swoosh’s gains in the U.S. Nevertheless, the company’s sales in the region grew 7 percent in Q3 to $3.8 billion, just shy of the $3.9 billion analysts had expected. (Nike had experienced a decline in North America during the same period last year.)

Overall, the company reversed its year-ago losses to post Q3 profits of $1.1 billion, or 68 cents per share, besting the 65 cents per share analysts had predicted.

Revenues also gained 7 percent year over year to hit $9.6 billion, in line with what market watchers had expected.

“In Q3, our team once again drove strong, healthy growth across NIKE’s complete portfolio,” said Mark Parker, Nike chairman, president and CEO. “Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital consumer experiences around the world.”

Revenues at the Nike brand, specifically, advanced 12 percent to $9.1 billion, driven by growth across wholesale and Nike direct-to-consumer categories including Sportswear and Jordan, and ongoing double-digit growth across footwear and apparel, the company said.

Sales at Converse, meanwhile, remained challenged, dipping 2 percent — helped by double-digit growth in Asia and digital but more than offset by ongoing declines in the U.S. as well as in Europe.

“The Consumer Direct Offense is delivering broad-based growth across all four of our geographies, led by continued momentum in China,” said Andy Campion, Nike EVP and CFO. “We will continue investing in key capabilities to drive Nike’s digital transformation and fuel strong profitable growth into next fiscal year and beyond.”

(Consumer Direct Offense is a strategy the firm unveiled in 2017, aimed at better serving consumers “more personally” and at scale.)

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