NEW YORK (AFP) – Shares of Nike tumbled on Thursday after the sports giant signalled a tepid near-term revenue outlook even as it promised to wow consumers with new offerings in an Olympic year.
The sports giant, which has been criticised by some Wall Street analysts over a lack of hot new products in recent times, reported flat quarterly sales and profits that were slightly lower than the year-ago period, but which topped analysts expectations.
Shares initially rallied on the results, which came only hours after the German football team picked Nike over Adidas in a win highlighted by the Chief Executive Officer on a conference call.
But Nike stock went steeply negative after Chief Financial Officer Matthew Friend projected only one per cent revenues growth in the upcoming quarter, its fiscal fourth quarter.
Friend also forecast a revenue drop in the “low single digits” in the first half of the next fiscal year, in part reflecting “the subdued macro outlook around the world,” he said.
Profits in the quarter ending February 29 came in at USD1.2 billion, down five per cent from the year ago period. Revenues were USD12.4 billion, essentially level with the year-ago stretch.
The results were dented by about USD400 million in one-time severance costs after job cuts, said Friend, who cautioned that near-term performance would be negatively affected by “transition” impacts as it phases out some older items in favour of new offerings.
