Despite posting 7 percent revenue growth year-over-year for Q3 (at $9.611 billion), Nike shares took a sizable hit on Friday after the company posted weaker-than-expected sales for its North American market. The brand also pitched waning expectations for Q4, saying that it expects to actualize with low single-digit gains compared to last year.
Nike stock prices were down more than 5 percent to $82.54 USD as of 2:30 p.m. EST. On Thursday, the brand had closed at a record-high of $88.01 USD, increasing 32 percent from last year.
Converse may be part of the equation for the sluggish North American performance, as sales were down 2 percent and driven primarily out of the U.S. and Europe, according to Nike’s fiscal report. Despite the disappointing figures, analysts remain optimistic about the athletic giant.
Simeon Siegel, an analyst for Nomura Instinet, stated: “In this environment, Nike is showing its stripes, standing as the clear outlier to the recurring revenue ceiling that dominates all brands.” J.P. Morgan analyst Matt Boss added that Nike is “historically conservative” with its forecasted numbers.
“We are still in the early stages of executing the ‘Consumer Direct Offense’ with much more opportunity ahead of us. So, we will continue to focus our investments on the digital transformation of Nike and in the areas of our business where we see the greatest potential to grow and create value for both consumers and shareholders,” said Nike CFO Andy Campion.
For more fashion news, read about the racial discrimination lawsuit Nike is facing from an ex-executive.
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