What happened
Shares of footwear giant Nike (NKE +1.57%) took a hit on Friday, falling about 6% as of 12:40 p.m. EDT.
The stock's pullback comes after Nike's fiscal 2019 third-quarter earnings release on Thursday afternoon. Shares are likely down following the report because of the company's weaker-than-expected North America sales growth and softer-than-anticipated guidance for its fiscal fourth-quarter revenue.
Image source: Nike.
So what
Driven by strength in the company's Nike Direct channel, or sales at company-owned retail stores and digital commerce, fiscal third-quarter revenue rose 7% year over year to $0.9.6 billion. When adjusting to exclude the impact of foreign exchange rates on currencies, revenue rose 11% year over year.
"The Consumer Direct Offense is delivering broad-based growth across all four of our geographies, led by continued momentum in China," said Nike CFO Andy Campion in the company's third-quarter earnings release.
A deceleration in North America sales growth may have disappointed some investors. Sales in the market increased 7% year over year, down from 9% growth in the prior quarter.
Check out the latest earnings call transcript for Nike.
Now what
In addition, management's guidance for fiscal fourth-quarter revenue to rise at a rate in the low single-digits may signify a greater deceleration than the Street was anticipating. Nike said it expects about six percentage points of foreign exchange rate headwinds during the quarter. On a constant-currency basis, Nike guided for revenue to rise by a "high single-digit" rate.
