Nike hit by competition from Under Armour, Adidas

Nike Inc. posted futures orders that missed analysts’ estimates, renewing concerns that the maker of sneakers and athletic appeal can’t maintain growth in the face of mounting competition.

The orders — a key indicator of demand for the brand — rose just one per cent in North America as of Aug. 31, according to a statement Tuesday from the Beaverton, Ore.- based company. Analysts had projected a five-per-cent gain. The figure tracks products that will be delivered between September and January.

“The slowdown in North America is worse than expected,” said Chen Grazutis, an analyst for Bloomberg Intelligence.

Increased competition from Adidas AG and Under Armour Inc. has taken a toll on the world’s largest athletic brand this year, with slowing sales growth in its home country. That’s hammered the stock, which is on pace for its first annual decline in eight years. Futures orders also came in just short of estimates in China.

The shares fell as much as five per cent to US$ 52.60 in late trading after the results were released. They had been down 11 per cent this year through Tuesday’s close.

Nike r e ported profi t of 73 cents a share, compared with an average analyst projection of 56 cents. Still, there were troubling signs beneath the surface, Grazutis said. Nike’s gross margin missed estimates by 100 basis points, suggesting that the company relied more heavily on discounts to fuel growth.