New York (AFP) – Nike reported a drop in first-quarter earnings Tuesday on flat sales as heavy promotions in North America again cut into profit.
Net income for the quarter ending August 31 was $950 million, down 24 percent from the year-ago period.
Revenues were unchanged at $9.1 billion.
Sales rose in all regions except North America, the biggest, where a retail industry shakeout has led to heavy discounting among vendors.
Nike also cited the unfavorable exchange rate as a factor for the weak North American sales.
In June, the company unveiled a new global sales structure targeting growth in the biggest cities and speeding the development time on new fashions and products in response to consumer demand.
The company has also ramped up direct selling to consumers through digital systems and agreed to sell a limited number of items on Amazon.
Nike forecast a low-single digit gain in revenues for the full year, with the recent weakening of the dollar boosting that figure.
Chief executive Mark Parker said he was “very bullish” that new product launches would ignite sales and optimistic about its direct selling initiatives.
Shares of Dow member Nike dropped 3.6 percent to $51.75 in after-hours trading.