Investing.com - Nike’s fiscal fourth-quarter revenue estimate came in below analysts’ expectations, sending shares in the shoe retailer down by more than 8% in early U.S. trading on Friday.
CFO Matthew Friend told investors in a post-earnings call that sales during the period are tipped to decline in the mid-teens percentage range. Analysts have been expecting a decrease of 12.22% to $11.07 billion, according to LSEG data cited by Reuters.
Friend added that an ongoing effort to clear out unsold inventory by offering discounts on older items could dampen fourth-quarter returns.
The comment contributed to the wiping out of initial after-hours gains in the stock that were fueled by better-than-anticipated third-quarter results. Demand during the period was boosted by upbeat shopper reactions to new shoe launches, which have been a key pillar of new CEO Elliott Hill’s push to turn around recently underwhelming performance at the Air Jordan maker.
The sportswear giant reported third-quarter earnings per share of $0.54 on revenue of $11.27 billion. Analysts polled by Investing.com anticipated EPS of $0.29 on revenue of $11.02 billion.
Still, overall quarterly sales fell 9% as Nike (NYSE:NKE) grappled with weakness in North America and China. North America sales dropped by 21% from a year ago to $1.1 billion from a year earlier, while revenue in greater China slumped by 42% to $421 million.
Gross margin declined by 330 basis points to 41.5%.
"[The] result provided fodder for both bulls and bears in the quarter, and [we] thus expect the stock to remain heavily debated going forward," analysts at Goldman Sachs (NYSE:GS) said. "We remain constructive on the stock but acknowledge the company is early in its turnaround journey."
(Yasin Ebrahim contributed reporting.)