Nike Inc (NYSE:NKE, XETRA:NKE) shares fell more than 14% on Wednesday as the athletic apparel and footwear maker reported unchanged quarterly revenue from a year ago and signalled caution for the months ahead.
Nike’s guidance for the fourth quarter points to revenue declining by 2% to 4%, while Wall Street analysts had been expecting 2% growth.
For the quarter ended February 28, Nike generated $11.28 billion in revenue, flat on a reported basis and down 3% on a currency-neutral basis. This was slightly ahead of the consensus $11.23 billion.
Wholesale sales rose 5% to $6.5 billion while Nike Direct revenue fell 4% to $4.5 billion due to weaker digital sales and lower performance at company-owned stores.
Earnings per share of $0.35 beat estimates of $0.31.
Gross margin declined 130 basis points to 40.2%, driven primarily by higher tariffs in North America, and net income dropped 35% to $0.5 billion, or $0.35 per diluted share.
Regionally, North America posted modest growth of 3%, while Greater China fell 7%. Converse revenue fell 35%, reflecting declines across all markets.
CEO Elliott Hill described the quarter as a step in a broader effort to strengthen the business, noting that the company is making progress on prioritized initiatives but that the turnaround is ongoing.
"The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of NIKE,” Hill said.