Nike Sales Climb, Despite Declines in North America -- Update

Nike Inc. sales climbed in its most recent quarter even as profit and revenue in its home market declined, as the sportswear maker attempted to sell more directly to consumers instead of through struggling sporting-goods chains and other intermediaries.

For the period ended Nov. 30, Nike's profit fell 9% to $767 million, or 46 cents a share, from $842 million, or 50 cents a share, a year earlier. Revenue rose 5% to $8.6 billion, though sales in North America fell 5% to $3.5 billion.

Analysts polled by FactSet expected profit of $665 million, or 40 cents a share, on sales of $8.4 billion.

During a challenging year for sportswear companies, Nike has attempted to increase its direct and online sales to customers and lessen its reliance on retailers. It has also contended with a resurgent rival, Adidas AG, whose sales have climbed in North America.

Chief Executive Mark Parker said the company is preparing to offer "new differentiated experiences" for shoppers over the next six months.

Nike's results come about two months after it said it would shake up its relationship with retailers, focusing on just 40 of its nearly 30,000 accounts in the coming years as it devotes more to online and direct sales. Some of the chains that sold Nike products, like the Sports Authority, have liquidated in recent years. Just in the past few months, Shiekh Shoes and Sports Zone, two regional chains that derived most of their sales from Nike, have filed for chapter 11 bankruptcy.

Over the summer, Nike agreed to sell products through Amazon.com Inc. after holding out for years, a sign of the online retailer's growing importance to big brands.

Selling directly to consumers has posed its own challenges. Nike's website suffered technical problems on Black Friday, and last month scores of customers complained on social media that they weren't able to buy shoes from Nike's "The Ten" collection, a collaboration with designer Virgil Abloh.

Danny Gallegos, a 26-year-old social-media marketer in Miami, said he tried shopping via Nike's SNKRS app nearly a dozen times this year and has yet to succeed in buying shoes. He's had better luck with an Adidas app, Adidas Confirmed, where he scored one pair of sneakers this year.

"My biggest question is whether or not it's a servers issue," he said. "If so, shouldn't multibillion-dollar companies be able to buy their way into a fix for that? What's the holdup?"

Shares were up less than 1 percent after hours.

--Lillian Rizzo and Katy Stech Ferek contributed to this article.

Write to Sara Germano at sara.germano@wsj.com

Nike Inc. sales climbed in its most recent quarter even as profit and revenue in its home market declined, as the sportswear maker attempted to sell more directly to consumers instead of through struggling sporting-goods chains and other intermediaries.

For the period ended Nov. 30, Nike's profit fell 9%, to $767 million, or 46 cents a share, from $842 million, or 50 cents a share, a year earlier. Revenue rose 5%, to $8.6 billion, though sales in North America fell 5%, to $3.5 billion.

Analysts polled by FactSet expected profit of $665 million, or 40 cents a share, on sales of $8.4 billion.

During a challenging year for sportswear companies, Nike has attempted to increase its direct and online sales to customers and lessen its reliance on retailers. It has also contended with a resurgent rival, Adidas AG, whose sales have climbed in North America.

On a call with analysts on Thursday, Nike executives pointed out some sales initiatives in the works, including one with the fashion startup Stitch Fix Inc. Nike Brand President Trevor Edwards said the company will also restrict some Jordan sneakers in the marketplace to preserve their exclusivity.

Nike's results come about two months after it said it would shake up its relationship with retailers, focusing on just 40 of its nearly 30,000 accounts in the coming years as it devotes more to online and direct sales. Some of the chains that sold Nike products, such as the Sports Authority, have liquidated in recent years. Just in the past few months, Shiekh Shoes and Sports Zone, two regional chains that derived most of their sales from Nike, have filed for chapter 11 bankruptcy.

Over the summer, Nike agreed to sell products through Amazon.com Inc. after holding out for years, a sign of the online retailer's growing importance to big brands. Nike Chief Executive Mark Parker said Thursday that the company was extending that pilot program with Amazon, adding that "the important part is that we enhance the brand through better presentation and then the sharing of data so we can better serve consumers."

Selling directly to consumers has posed its own challenges. Nike's website suffered technical problems on Black Friday, and last month scores of customers complained on social media that they weren't able to buy shoes from Nike's "The Ten" collection, a collaboration with designer Virgil Abloh.

Danny Gallegos, a 26-year-old social-media marketer in Miami, said he tried shopping via Nike's SNKRS app nearly a dozen times this year and has yet to succeed in buying shoes. He said he has had better luck with an Adidas app, Adidas Confirmed, where he scored one pair of sneakers this year.

"My biggest question is whether or not it's a servers issue," he said. "If so, shouldn't multibillion-dollar companies be able to buy their way into a fix for that? What's the holdup?"

Nike shares fell 1.4% after hours.

Finance chief Andrew Campion said the company expects revenue growth for the current period to be roughly in the mid-single-digit percentage range while promotions in the U.S. market will continue to weigh on margins.

--Lillian Rizzo and Katy Stech Ferek contributed to this article.

Write to Sara Germano at sara.germano@wsj.com

(END) Dow Jones Newswires

December 21, 2017 18:41 ET (23:41 GMT)