Williamson incident to blame as Nike's share price falls despite Q3 gains?
The share price of Nike, the US sportswear giant, fell yesterday after it announced its third-quarter financial results, which included weaker-than-expected sales in North America.
The fall came despite revenues increasing by 7 per cent to $9.6 billion (an 11-per-cent increase on a currency-neutral basis), and net income of $1.1 billion, or 68 cents a share, compared with a net loss of $921 million, or a loss of 57 cents per share, a year ago.
In North America, sales were up 7 per cent to $3.81 billion, excluding currency changes, less than some analysts has expected.
In Europe, the Middle East and Africa, sales were up 12 per cent, excluding currency changes, while, in China, revenue climbed 24 per cent.
The company pointed to “continued momentum in China,” saying it is still “bullish” about growth there, despite uncertainty about tariffs. Andy Campion, Nike’s chief financial officer, told analysts: “We have great momentum in China, but we are still far from realizing the long-term opportunity in this market.”
There was no mention of a high-profile recent incident in which Zion Williamson, a Duke University star basketball player, broke his Nike shoe during a game and sprained his knee.
Kian Salehizadeh, a senior analyst at investment firm Blockforce Capital, told Reuters: “While it’s not very clear what caused the domestic weakness, it’s possible that the news of what happened with the Duke University player’s shoe had a short-term negative impact.”
Earlier this month, Adidas, Nike’s arch-rival, reported fourth-quarter revenues of €5.23 billion ($5.9 billion), above analysts’ expectations of €5.17 billion.
However, operating profit was €129 million, below the projected €141.3 million.