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Investing.com - Nike’s fiscal fourth-quarter revenue estimate came in below analysts’ expectations, sending shares in the shoe retailer down by more than 8% in early U.S. trading on Friday.
CFO Matthew Friend told investors in a post-earnings call that sales during the period are tipped to decline in the mid-teens percentage range. Analysts have been expecting a decrease of 12.22% to $11.07 billion, according to LSEG data cited by Reuters.
Friend added that an ongoing effort to clear out unsold inventory by offering discounts on older items could dampen fourth-quarter returns.
The comment contributed to the wiping out of initial after-hours gains in the stock that were fueled by better-than-anticipated third-quarter results. Demand during the period was boosted by upbeat shopper reactions to new shoe launches, which have been a key pillar of new CEO Elliott Hill’s push to turn around recently underwhelming performance at the Air Jordan maker.
The sportswear giant reported third-quarter earnings per share of $0.54 on revenue of $11.27 billion. Analysts polled by Investing.com anticipated EPS of $0.29 on revenue of $11.02 billion.
Still, overall quarterly sales fell 9% as Nike (NYSE:NKE) grappled with weakness in North America and China. North America sales dropped by 21% from a year ago to $1.1 billion from a year earlier, while revenue in greater China slumped by 42% to $421 million.
Gross margin declined by 330 basis points to 41.5%.
"[The] result provided fodder for both bulls and bears in the quarter, and [we] thus expect the stock to remain heavily debated going forward," analysts at Goldman Sachs said. "We remain constructive on the stock but acknowledge the company is early in its turnaround journey."
(Yasin Ebrahim contributed reporting.)