Nike hit by fierce US competition and a strong dollar

 
Oliver Gill
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General view of Old Trafford
Manchester United ditched Nike in 2014 in favour of a 10-year deal with Adidas (Source: Getty)

Nike shares fell over one per cent in US trading after its third quarter revenue numbers failed to impress the market.

A strong dollar and intense US competition from the likes of Adidas and Under Armour weighed on the world's largest footwear maker.

The sportswear giant report $8.43bn of revenues over the last three months, slightly behind the $8.47bn expected by a consensus poll prepared by Reuters.

Adidas has made something of a comeback of late, signing celebrities such as Kanye West to promote its fashion offering. Shares in the German firm jumped earlier this month after it the group boosted its sales targets and vowed to focus on the US market.

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Meanwhile Under Armour, a comparatively newer player, has made ground by signing basketball players to help it eat into Nike's dominate position via its Jordan brand.

Both of Nike's major competitor's have also agreed partnerships with major US supermarkets to sell their wares.

Mark Parker, Nike's chairman, president and chief exec said: “The power of Nike's diverse, global portfolio delivered another solid quarter of growth and profitability."

Nike said it was focussing on reaching out directly to customers by leveraging its digital capabilities.

Currency

Chinese sales jumped 15 per cent, excluding the impact of currency movements.

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But on a headline basis they were dragged back by a strong dollar. A nine per cent increase in revenues meant it was the first quarter in the last nine that Nike had failed to deliver double-digit revenue growth in the area.

The company grew its cash reserves, ending the period with $6.2bn in the bank, up $1.1bn compared with last year. This was despite Nike continuing its four-year $12bn share repurchase programme. To date it has repurchased $3.6bn shares since starting the initiative in November 2015.

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