The increase in quarterly earnings and the forecast of future orders growth of Nike Inc (NYSE: NKE) has not met expectations of analysts, indicating difficulties of the struggle of sportswear and shoes producer with competitors, such as Adidas (DE: ADSGN) and others, especially in North America.
While Nike still has a dominant position in North America, its largest market, analysts say that the company is gradually beginning to yield to the German Adidas, while smaller US firms such as UnderArmour Inc continue to capture market share.
Nike's revenue in the fourth quarter, which ended on 31 May, has suffered because of the strengthening dollar, which negatively impact on overseas sales. Eliminating excess inventory of goods in North America also hit sales and margins, and is expected to have an impact on the financial results of the current quarter, said Nike.
Noting the observed volatility in the currency markets after the unexpected Brexit referendum decision, the company maintained its full-year forecast for sales growth.
Nike expects the revenue to increase by 7-9 % in the fiscal year, which ends in May 2017. For comparison, Adidas expects to increase annual sales, adjusted for the impact of exchange rates, by 10-12 %, where a large contribution will come from the Olympic Games in Rio de Janeiro and the European football championship in France.
The number of future orders of Nike, which is a measure of the demand for the next few months, did not meet market expectations.
Orders for the June-November in North America rose 6 % in the fourth quarter. Analysts polled by Consensus Metrix, a research firm, predicted 9 % growth in future orders.
Nike's revenue for the fourth quarter rose approximately by 6 % to $ 8.24 billion, while analysts polled by Reuters had expected it in the amount of $ 8.28 billion.
Sales in North America remained virtually unchanged during this period, while sales of footwear increased by 2 %.
Net income decreased by 2.2 % to $ 846 million. In terms of per share, the profit remained unchanged and amounted to 49 cents, one penny higher than the analysts predicted.