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Nike Inc. posted more weakness in China and its Converse brand, sending shares down and offsetting higher-than-expected revenue in the latest quarter.
Direct-to-consumer sales missed expectations, while Converse plunged 30 percent in the fiscal second quarter ended Nov. 30. Revenue rose 1 percent to $12.4 billion, above the average of analyst estimates.
The shares fell 5.6 percent at 4:45 p.m. in extended trading in New York. The stock has dropped 13 percent so far this year and is headed for its fourth consecutive annual decline.
While Nike is sharpening its focus on key sports and cities and is rebuilding ties with retail partners, investors are likely looking for more progress in other problem areas.
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The direct-to-consumer category “and China disappointed and we need to hear more on when things will get back on track,” said Poonam Goyal, senior analyst with Bloomberg Intelligence. “Other than that the results were solid.”
The company has also been prioritising a reset of Converse’s marketplace and brand. Converse has long relied on the Chuck Taylor sneaker to drive sales but has struggled to ignite excitement elsewhere.
“Nike is in the middle innings of our comeback,” chief executive officer Elliott Hill said in the statement, adding that the company still has work to do when it comes to executing its Win Now strategy that includes realigning personnel and repairing ties with retailers.
The company has gained ground in the key running category as well as the North American market.
By Lily Meier
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