NKE Nike Inc

By Sara Germano 

Nike Inc. reported an 8% jump in quarterly sales Tuesday, but slowing future demand for its sneakers and apparel fanned investors' concerns about the sportswear maker's growth prospects.

The company said world-wide futures orders -- a calculation of the amount of goods scheduled for delivery within the next six months -- rose 5% for the period ending January 2017, compared with 9% growth for the same period a year ago.

In the North American region, which comprises the lion's share of Nike's business, futures orders rose just 1% in the fiscal first quarter, compared with 14% growth in the year-ago period. Analysts typically have monitored futures orders as a way to measure demand for Nike's products.

Shares of Nike fell 2% in after-hours trading to $54.19, after ending the 4 p.m. session at $55.34.

In a significant shift, Nike finance chief Andy Campion said Tuesday the company will no longer report futures orders in its quarterly earnings news releases. They will instead be discussed on a conference call with analysts and reported in regulatory filings, he said.

"Futures orders continue to be an important and valuable aspect of our operating model. That said, the relationship between reported futures and reported revenue in a given quarter has become less correlated" as the company sells more items directly to consumers, Mr. Campion said.

The move marks not only a shift in how Nike reports its results, but a wider change in retail. Looking to replicate the success of fast-fashion houses such as H&M and Zara, many manufacturers are aiming to bring products to market more quickly, and sell those products directly to consumers, instead of through wholesale partners.

At its investor day last fall, Nike said it hoped to more than double its annual direct-to-consumer sales to $16 billion by 2020.

Before Tuesday's earnings report, Nike had been contending with a rapidly changing sporting-goods industry, including the bankruptcy and liquidation of major retail partners, including The Sports Authority Inc., among others.

Nike also has been facing increasing pressure from rivals Under Armour Inc. and Adidas AG in its domestic market. Analysts have noted both companies have grabbed market share from Nike, the overall leader, in crucial categories such as basketball and casual footwear.

Nike Chief Executive Mark Parker acknowledged the company has faced stiffer competition from upstart competitors, as the athletic look has influenced apparel and footwear styles.

While this summer featured two premier sports events in the Olympic Games and the European soccer championship, "the look of sport continues to influence everyday styles around the world. As a result, new brands are entering into the athletic landscape," Mr. Parker said.

Mr. Campion said North American sales should outpace futures orders growth in the region for the balance of the year, as Nike expects stronger sell-through to consumers.

In the first quarter, Nike's revenue was $9.06 billion as North American sales grew 6.1% to $4.03 billion. Overall, Nike reported a profit of $1.25 billion, or 73 cents a share, up from $1.18 billion, or 67 cents a share, a year earlier. Analysts had expected per-share profit of 56 cents.

--Tess Stynes contributed to this article.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

September 27, 2016 19:39 ET (23:39 GMT)

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