Nike's future orders forecast misses, shares drop
Nike Inc forecast future orders below analysts' estimate on a constant currency basis, in part due to weakness in its basketball category and increased competition from Adidas , which has continued to gain ground in North America.
Shares of the world's largest footwear maker were down 4.4 percent at $52.90 after the bell on Tuesday. The stock is the worst performer on the Dow Jones Industrial Average, down about 11 percent this year.
The company forecast worldwide orders for delivery from September 2016 through January 2017, a demand gauge the company calls "futures orders", to rise 7 percent on a constant currency basis. The forecast ��� keenly watched by investors ��� is the lowest in five quarters.
Analysts on average had expected futures orders to rise 8 percent, according to Consensus Metrix.
Although Nike and its Jordan brand still command the lion's share of the U.S. footwear market, rivals Adidas and Under Armour are chipping away at the company's decades-long dominant position.
Futures orders in Nike's biggest market, North America, also missed expectations, rising only 1 percent, much lower than the 5 percent increase analysts had expected.
Sales of German shoemaker Adidas' classic line of shoes jumped nearly fourfold in the United States in August, according to data from market research firm NPD, while Under Armour has benefited from deals with basketball star Stephen Curry and golfer Jordan Spieth.
Nike's net income rose 5.9 percent to $1.25 billion, or 73 cents per share, in the first quarter ended Aug. 31.
Analysts on average had expected a profit of 56 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 7.7 percent to $9.06 billion, beating the average analyst estimate of $8.87 billion.
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Sriraj Kalluvila)