Nike shares are tumbling after a surprising miss on a key gauge of future sales
The athletic-apparel giant reported adjusted earnings per share (EPS) of 49 cents on revenues of $8.2 billion for its fiscal fourth quarter.
Worldwide futures orders - which reflect retailers' demand for delivery of Nike products over the next few months - rose less than expected, by 11%. That's excluding the impact of currency conversion.
Nike shares fell nearly 6% in after-hours trading.
Analysts had forecast that Nike earned 48 cents in adjusted EPS, and that revenues rose 6% to $8.28 billion, according to Bloomberg. Worldwide futures orders were expected to gain 13%.
Nike's results come amid growing competition in the athletic-apparel industry and concern that the broader sector is slowing. Morgan Stanley analysts downgraded the stock to "Equal Weight" early in June, noting that established rivals like Adidas and Under Armour had stolen some of Nike's market share in footwear.
Additionally, they said the rise of online shopping and retail bankruptcies had created excess inventory for Nike. Inventories as of May 31 totaled $4.8 billion, up 12% year-on-year, the earnings results showed.
Gross margins were lower than expected, at 45.9%, as Nike cleared excess inventory in North America.
The company's shares have dropped 15% year-to-date.