Confronting Less Rosy Outlook, Nike Shares Plunge Nearly 4 Percent
Mar, 22nd 02:53
Shares of Nike Inc. fell 3.71 percent in after-hour trading on Tuesday after the world’s largest sportswear maker reported a jump in quarterly profit but forecast a tepid outlook for sales growth due to stiffer competition and a changing retail landscape.
The athletic apparel company posted a quarterly profit of $1.14 billion, or 68 cents a share, up from $950 million, or 55 cents a share, a year earlier. Revenue also found itself on an increase, rising 5% to $8.43 billion. If was not hurt by a stronger U.S. dollar, revenue would have risen 7%. The company anticipates that currency exchange rates will continue to weigh on results through the end of its next fiscal year.
Besides currency fluctuation, Nike has been struggling with competition from a resurgent Adidas AG which refocused its efforts on the key North American market. Nike’s sales in its home market rose only 3% in the quarter ended February 28.
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