The world's largest sportswear company has issued mixed results
The share price of giant US sportswear group Nike, which had fallen by more than 15% this year, slid by another 4% last night to just over $50 as its fourth quarter results disappointed the markets and confirmed it’s under significant pressure from competitors such as Adidas in Europe and from challenger brand, Under Armour in its home market.
It’s still a highly profitable company – while its net income or profits for the three months to the end of May were 2% lower, they still amounted to $846m while revenues in the period were 6% lower at $8.25bn.
Eric Risberg / AP
Looking forward, its increasingly challenging battle with Adidas outside the US will get more difficult if the dollar continues to strengthen while Under Armour has hit sales in the key basketball shoe market in the US.
Nike could benefit from the fact that its key endorsing athlete in the US, LeBron James has led the Cleveland Cavaliers to their first NBA Championship. His team defeated the Golden State Warriors, who were led by Under Armour's poster-boy and league MVP Steph Curry.
The lag in the company's share price comes after it surged by 30% last year, that was the biggest gain by a company listed in the Dow Jones Industrial Average.
"Our consistent growth is fueled by innovation, which is why fiscal 2016 was such a breakthrough year for Nike in everything we do," said Mark Parker, President and CEO of Nike Inc.
"From product to manufacturing to how we serve our consumers – more personally and at scale – we’ve raised the bar of what’s possible. It’s a great time to be in sports, and the Nike brand has never been stronger. Fueled by our unrivalled roster of athletes, fiscal 2017’s calendar of sport moments promises to build on our business momentum and inspire consumers," he continued.