By Yasin Ebrahim
Investing.com -- Nike reported Thursday better-than-expected first-quarter results, though performance was held back by a slip in margins as price cuts at its Nike direct business in North America and weakness in China weighed.
Nike Inc (NYSE:NKE) shares lost 2% in after-hours trade following the report.
Nike announced earnings per share of $0.93 on revenue of $12.69 billion. Analysts polled by Investing.com anticipated EPS of $0.92 on revenue of $12.29 billion.
Nike brand digital sales increased 16%, led by "double-digit growth in EMEA, North America and APLA, partially offset by declines in Greater China," the company said.
Sales in North America fell 4%, while in China, a key market for the company, sales fell 16% to $1.66 billion.
Gross margin decreased 220 basis points to 44.3%, led by higher freight and logistics costs and price cuts in its NIKE Direct business, and unfavorable changes in net foreign currency exchange rates.
"The overall decrease in margins was primarily driven by North America, which took measures to liquidate excess inventory through NIKE Direct markdowns and wholesale marketplace actions," the company said.