Nike has recorded its slowest quarterly sales growth in almost seven years as it expands its retail business amid an intensifying competition in the sportswear market.
For the first quarter ending August 31, the US company sustained revenue growth around the world, but an expected decline in North America wholesale revenue slowed it down.
Diluted earnings per share for the quarter stood at $0.57 (£0.42), down 22 per cent and driven by a gross margin decline, a higher effective tax rate and higher additional expenses. This still beat analysts‘ average estimate of 48 cents per share.
Nike’s overall revenues hit $9.07 billion (£6.7 billion) during the quarter, which is flat year-on-year on a reported and currency-neutral basis but missed the average analyst estimate of $9.08 billion, according to Thomson Reuters.
Meanwhile its net income decreased 24 per cent $1.25 billion (£932 million) to $950 million (£708 million).
Revenues for its Converse division reached $483 million (£360 million), down 16 per cent on a currency-neutral basis thanks to declines in the North America market.
For the Nike brand on its own, revenues reached $8.6 billion (£6.4 billion), up two per cent on a currency-neutral basis and boosted by growth in Chinese, EMEA, Asia-Pacific and Latin American markets.
Nike is in the midst of a battle with Adidas in North America, where it has taken market share, while demand for athleisure has gone into decline.
“This quarter, we captured near-term opportunities through our new consumer direct offense,” Nike chairman, president and chief executive Mark Parker said in a statement.
“Looking ahead to the rest of fiscal 2018, we will ignite Nike‘s next horizon of global growth through the strength of our brand, the power of our innovative products and the most personal, digitally-connected experiences in our industry.”