Why Nike Stock Fell Friday – The Motley Fool


What happened

Giant actions of the shoe Nike (NYSE: NKE) took a hit Friday, down about 6% at 12:40 pm. EDT.

The decline in stocks comes after the release of Nike's results for the third quarter of fiscal 2019, Thursday afternoon. Stocks are likely to decline following the release of the report due to weaker-than-expected sales growth in North America and lower-than-expected guidance for fourth-quarter revenue.

A Nike shoe

Source of the image: Nike.

So what

Driven by the strength of the company's Nike Direct channel, or through the company's retail store sales and by digital business, third-quarter revenue revenue grew 7% over the previous year. Previous year, to establish at $ 0.9.6 billion. Adjusted to exclude the impact of currency exchange rates, sales increased by 11% year-on-year.

"The offense against the direct consumer generates widespread growth in our four geographic regions, driven by continued momentum in China," said Andy Campion, Nike's chief financial officer, in the report of his results of the third trimester.

Deceleration in sales growth in North America may have disappointed some investors. Market sales increased 7% from one year to the next, down from 9% growth in the previous quarter.

Now what

In addition, management's expectation that Q4 revenue is expected to grow at less than 10% could mean a more significant deceleration than Street anticipates. Nike said it expected about six percentage points of unfavorable exchange rate conditions during the quarter. On a constant currency basis, Nike said revenue should rise by a "high, single digit rate."


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