Weakness In The North American Market, Nike'S Fourth Quarter Earnings, Expected Earnings Backwards

Adidas AG (ADSGn.DE)

The group's strong recovery in the world is Nike Inc. (NYSE:NKE).

The group has caused great pressure, plus Under Armour Inc. (NYSE:UA).

The fierce growth momentum in the North American market has made the world's largest sporting goods manufacturer fail to achieve sales growth in the key North American market in the last 2016 fiscal year, resulting in a return to overall profitability and the end of the strong growth since the 2009 recession.

On Wednesday, 28, after the results were announced on Wednesday, the Nike Inc. (NYSE:NKE) trading hours fell by 7.5%, and eventually fell 4.03% to 50.95 dollars, making the stock's cumulative decline to 18.5% since the beginning of the year.

In 2015, the group was named "crown road" with an increase of 30%.

As the sales of clothing and equipment declined, in the fourth quarter of May 31st, the Nike Nike brand North America only maintained 2% of the same income last year - $3 billion 735 million.

However, thanks to the growth of overseas markets, the overall revenue of Nike Inc. and Nike group still rose 6%, from 7 billion 779 million US dollars in the same period last year to 8 billion 244 million US dollars, slightly lower than the US $8 billion 280 million expected by the market, excluding 9% of the increase in the exchange rate, and a significant retreat from 14% in the three quarter, mainly reflected in the weaker sales of Nike Nike in the Greater China, Japan and the three markets in central and Eastern Europe.

Fixed exchange rate, the third largest market, the growth rate of revenue in the Greater China region dropped from 27% in the three quarter to 23%, and the income was $979 million. Japan's growth rate also decreased from 27% to 15%, while in eastern and central Europe, zero growth was achieved, while the growth rate in the three quarter of the region was as high as 29%.

From overseas markets to only second big markets, Western Europe has made progress, increasing from 12% in the three quarter to 19%, with an income of 1 billion 502 million US dollars.

Let the market disappointed and the sales outlook of Nike Nike brand.

The futures orders delivered during the 6-11 months of this year increased by 8% to 14 billion 900 million US dollars, less than 9% of the total expected value of Consensus Metrix, and the fixed exchange rate increased by 11%, or worse than that of Consensus Metrix, which was 13% lower than that of the three quarter.

Edward Jones analyst Brian Yarbrough pointed out that the weakening demand for basketball shoes damaged the futures order data.

In the fourth quarter, Nike Inc., Nike Group recorded a net profit of $846 million, down 2.2% from $865 million a year ago, with a diluted earnings of $0.49 per share, slightly better than the market expected $0.48.

Gross profit margin shrank by 30 basis points to 45.9%, and the rise in average selling price was offset by the adverse effects of higher product costs, inventory clearance and exchange rate fluctuations.

As of May 31st, the group's overall inventory rose by 11.6% to $4 billion 838 million a year.

The group chief financial officer, Andrew Campion, said at the analyst meeting after the earnings report that the higher base last year was a slight decline in the fourth quarter performance. He stressed: "our fundamentals continue to show strong momentum and can continue to promote growth and profitability."

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In the 2016 fiscal year, the group achieved a total revenue of US $32 billion 376 million, an increase of 5.8% over the 30 billion 601 million US $2015 in fiscal year and a 12% increase after excluding the exchange rate effect.

Net profit also increased by 14.9% to $3 billion 760 million, and the diluted earnings per share were $2.16.

Nike Inc. Nike group first disclosed the sales data of Jotun Brand Jotun brand.

The wholesale revenue of the brand increased by 18.2% to $2 billion 753 million a year, excluding the exchange rate, which increased by 21%.

At the same time, the income of basketball category of Nike Nike brand decreased by 0.5% to 1 billion 378 million US dollars. On the contrary, Stephen Curry Stephen curry endorsed Under Armour Inc., and Andrew 2015 in the fiscal year, the footwear grew 57.3%.

Because of the weak performance of Nike Nike brand, especially basketball category in North American local market, some analysts have taken the lead in reducing the target price of Nike Inc. (NYSE:NKE) before the financial report.

SportsOneSource data show that although Nike Nike brand still dominates the North American basketball shoe market with more than 90% of the market share, its share is being eaten by Under Armour Inc. Andrew.

In the field of functional sports shoes and fashion sports shoes, Adidas AG Adidas group has been unstoppable in the last two seasons.

Finish Line Inc. NASDAQ:FINL, the US sporting goods retailer, released its earnings last week, and its chief executive, Sam Sato, pointed out that the two brands of Adidas and Adidas Under Armour and Inc. have explosively increased, and analyst Brian Yarbrough also said that more and more people choose to buy Adidas products, and some American retail businesses also give more room to the brand.

In addition, NPD Group data show that up to 700 sports brands are now competing in highly valued female markets.

Analysts believe that Nike Inc., Nike group has been sitting in the sporting goods industry for too long. Any competitor can hardly shake its status. While the group is still complacent, competitors have risen rapidly.

Nike Inc. Nike group now expects revenue growth for the 2017 fiscal year to be up to May 31, 2017, and the expected growth rate of the fixed exchange rate Adidas AG Adidas group is 10%-12%.

Nike Inc., Nike Group executives at the analysts' meeting after the earnings report revealed that the first quarter revenue growth is expected to be in the median figure, 4%-6%, and the market is expected to be 9%. CEO Mark Parker has reaffirmed the medium-term goal of the 2020 fiscal year's annual revenue of 50 billion US dollars.