Investors were looking for a slam dunk.
When Nike reports quarterly results, the world’s largest athletic-gear maker often shoots and scores. But when sales growth is a little lighter than expected, the fans on Wall Street are known to jeer their displeasure.
That’s the takeaway from the latest results from Nike, which on Thursday reported an 8% jump in revenue, up to $8 billion for the quarter ending Feb. 29. Earnings per-share were up 22% to 55 cents per share, better than the 48 cent projection by analysts.
But sales growth wasn’t as strong as expected, as analysts had hoped for $8.2 billion in revenue. Nike has missed Wall Street’s projections for that metric for two consecutive quarters, and three of the past five. The company is selling a lot more athletic gear, but expectations are lofty and the company is seeing more competition from Under Armour ua and a resurgent Adidas addyy .
Nike’s nke shares were trading lower in after-hours trading, down around 6%.
Some analysts that track Nike warned that industry sales data indicated Nike had lost share to Adidas and Under Armour in recent weeks, as both of those firms have stepped up innovation. Ahead of the latest report, Canaccord Genity analyst Camilo Lyon said he saw little upside to Nike’s sales for the third quarter, saying growth for Under Armour’s Stephen Curry basketball shoes was at the expense of gear tied to LeBron James and Kobe Bryant – though Michael Jordan gear appeared to remain solid.
Interestingly, Nike’s sales would look like a home run to almost any other apparel maker of its size. Sales were up in the double digits across all regions, excluding swings in currency. Nike brand footwear sales were up 18%, while footwear grew 14%.
And Nike, which debuted a ton of new gear last week – including a concept shoe that ties itself – is projected to perform well in 2016 as it benefits from the hype that comes with the Summer Olympics. Sales for the current fiscal year, which ends in May, are expected to rise 7%.
Nike executives told analysts during a conference call that revenue on a currency neutral basis would be within the range of high-single digits to low double-digit growth. That gave Nike more flexibility than the projection it outlined in October, when it targeted 10% revenue growth.
“In the Olympic years, we always have more innovation than normally,” Chief Executive Mark Parker told analysts. He said digital continued to be “incredibly important to us” and would be a continued focus for the company with a steady stream of innovation.
Encouragingly, Nike on Tuesday stuck with its revenue projections for this year. And importantly, when executives were asked about possible store closures in the retail space, they said their forecasts for “future” orders weren’t affected by that change in wholesale retail space. That question was likely in response to the recent bankruptcy of Sports Authority, which is planning to shutter stores.