Nike shares fall on US sales

Nike shares declined the most in almost six weeks after the firm squelched any hope of a quick turnaround at its ailing US operations.

Nike shares fall on US sales

The world’s biggest sportswear maker expects North American sales to decline again this quarter, following a 3% dip in the region last quarter. Nike’s Converse business also will drop in the current period.

The slump has forced Nike to rely more heavily on overseas growth, especially in China.

International sales — along with an aggressive cost-cutting plan — helped the company post first-quarter profit that topped estimates.

CEO Mark Parker vowed to ignite global growth by “innovative products and the most personal, digitally connected experiences in our industry”.

But it’s hard to tell how soon that vision will revive sales in its US home market.

Nike expects its annual sales to rise by a percentage in the mid-single digits, up from $34.4bn (€29.1bn) last year. Its margins will narrow in the latest current period, at about the same rate as the previous three months, Nike said on a conference call.

Nike shares fell as much as 5%, paring its gains this year to only 1%.

Nike is contending with other distractions as it tries to turn around its US operations.

The company was pushed into the unfamiliar position of taking sides against a sitting US president when Donald Trump harshly criticised NFL players who take a knee during the national anthem to highlight inequality.

Even as Nike backed players’ right to not stand for the anthem, US federal authorities announced a probe into criminal influence in NCAA basketball.

While the charges involved rival Adidas, one former Nike employee was named by prosecutors. The company said it believes in “fair and ethical play — both in business and sports”.

With major US retailers faltering over the past 18 months, Nike has been trying to generate more revenue through its own stores and websites.

It’s also pursuing new channels for distribution, including inking a deal this year to sell lower-end items through Amazon.com.

Earnings were 57 cents a share in the first fiscal quarter, which ended August 31. Revenue amounted to $9.07bn, slightly short of estimates.

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