Nike Beats Q1 Estimates but Sales in North America Are Down

Nike Inc (NYSE:NKE) reported its first quarter results on Tuesday which saw the company record an earnings per share of $0.57, well above forecasts of $0.48. Although the company met forecasts, it saw a decline from a year ago when Nike posted earnings per share of $0.73, for a drop of 22%.

A look at the different segments shows that footwear sales were flat and equipment was down 1%. Apparel was the only segment that saw positive sales growth with an increase of 4% from the previous year.

A breakdown by region tells us that North America was the worst performing market with sales declining 3% from a year ago, but at $3.9 billion it still made up the largest portion of the company’s revenues for the quarter.

The Europe, Middle East & Africa region saw year-over-year sales increase by 5% with apparel leading the way with a double digit increase of 10%. Combined with North America, these parts of the world have made up almost three-quarters of the company’s total sales this quarter.

Asia Pacific & Latin America saw growth of 6% but it was the Greater China region which had the strongest growth with revenues up 12% from 2016.

It may be disappointing to see that sales are declining in Nike’s home market, but the saturation in North America is going to lead to limited growth opportunities. However, positive results in the Asian and Latin American markets are encouraging and could suggest greater opportunities ahead for Nike in other parts of the world.