Nike touts edgy ads but shares fall on mixed earnings

NEW YORK: Nike’s CEO said a controversial ad campaign featuring Colin Kaepernick was connecting with consumers worldwide but shares fell after the sports giant reported slowing growth in China.

Nike Chief Executive Mark Parker, commenting on an earnings call for the first time since the Kaepernick ad was released September 3, said he was ‘very proud’ of the spots and that the company had seen an uptick in online traffic and social media mentions since it was released.

“We know its resonated actually quite strongly with consumers, obviously here in North America but also around the world,” he said.

“It’s really transcended North America to touch people around the world.” The comments came as Nike reported a 15 per cent jump in earnings for fiscal first quarter 2019 to US$ 1.1 billion.

Revenues climbed 10 per cent to US$ 9.9 billion for the period ending August 31.

Nike scored revenue gains in all four of its regions, with the strongest increase in China, where year- over-year revenues gained 24 per cent to US$ 1.4 billion.

However, that jump was a bit below the 35 per cent leap in yearover-year revenues reported in the prior quarter.

Nike’s results were also pinched somewhat by higher costs, as it ramps up spending on sports marketing and its direct selling business.

That spending caused the profit margins to come in below some analyst forecasts.

Chief financial officer Andy Campion said full-year revenue growth was now projected at the low end of the prior range due to the strong dollar.

Parker defended the spending as needed to realise the ambitions for more direct selling to consumers and “becoming more personal at scale.” — AFP