Nike Inc. shares dropped after hours on Thursday after the company reported quarterly sales that were lower than what Wall Street had expected. The company said the results “highlighted challenges” that caused it to change its outlook for the coming fiscal year.
The company’s earnings report didn’t say anything else about that prediction. But Nike NKE, +0.14% has had trouble with customers who are less willing to spend after two years of paying more elsewhere.
In a release on Thursday, Chief Financial Officer Matthew Friend said, “We are taking steps to reposition Nike to be more competitive and to drive sustainable, profitable long-term growth.”
In the fiscal fourth quarter, the company made $1.5 billion, or 99 cents per share. This is up from $1.03 billion, or 66 cents per share, in the same quarter last year. Nike made $1.01 a share after restructuring costs were taken into account.
Sales dropped by 2% to $12.6 billion.
FactSet polled analysts, and they thought that Nike would report adjusted earnings of 84 cents per share on sales of $12.86 billion.
After hours, shares dropped 5.3%.
Some analysts think that easier comparisons and the Summer Olympics in Paris could be good for Nike’s business. But before Thursday, expectations were already low because people were worried that people would continue to be cautious.
Nike has tried to respond with new products, such as new tennis shoes and clothes for women, the Jordan brand being used for more than just basketball, and new “Air” technology. But it has fired people and cut costs. In the last quarter, digital sales went down because of more competition and less demand, which led to bigger price cuts.
Nike has said it will focus more on selling and marketing through outside retailers. This comes after years of trying to sell more products on its own, both online and in its own stores. It also said that it would improve the looks of displays inside stores.
Friend told investors in March that Nike “owns” the fact that it doesn’t like how its brand is being shown in wholesale. “Our main goal should be to improve the experience of customers when they interact with our brand.”
