Nike shares strike down Friday morning after the sneaker maker reported weaker-than-expected sales in North America during its latest phase of the moon and warned revenue growth could slow down during the fourth and current quarter.
The company told analysts Thursday evening that it look forwards sales during its fiscal fourth quarter will be up a high single-digit rate, on a constant currency basis. But currency headwinds are count oned to reduce that growth by about 6 percentage points, CFO Andy Campion said, resulting in low single-digit gains contrasted with a year ago.
Nike shares were falling more than 4.5 percent Friday morning. The supply had closed Thursday at a record high of $88.01, having climbed more than 32 percent over the existence 12 months.
Though Nike’s fourth-quarter earnings outlook is shy of Street estimates, J.P. Morgan analyst Matt Boss thought in a research note that Nike has been “historically conservative” with its forecast.
He said Nike selling sundry directly to consumers, and at full price, should continue to boost gross margins and help the company exceed its own standpoint.
Separately, Nomura Instinet analyst Simeon Siegel raised his price target on Nike shares to $91 from $85, result from the retailer’s third-quarter earnings release.
“In this environment, Nike is showing its stripes, standing as the clear outlier to the reappearing revenue ceiling that dominates all brands,” Siegel said.
On Thursday, Nike told analysts its investments in online initiatives and its “Consumer Without Offense” — where it’s focused on getting new products to market with speed — were just starting to pay off.
“We are inert in the early stages of executing the ‘Consumer Direct Offense’ with much more opportunity ahead of us,” Campion told. “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 yield fruit and create value for both consumers and shareholders.”