• Q1 earnings down 24% to US$950m
  • Gross margin slips 180 basis points to 43.7%
  • Total revenues flat at $9.1bn
In the groups North America business, sales slipped 3% to $3.92bn, while Greater China sales were up 9% to $1.11bn

In the group's North America business, sales slipped 3% to $3.92bn, while Greater China sales were up 9% to $1.11bn

Shares in Nike Inc slipped by 3.58% to US$51.78 yesterday (26 September) as the US sporting goods giant reported flat total sales and a decline in earnings during the first quarter.

Net income in the three months to the end of August decreased 24% to $950m from $1.25bn a year earlier, as lower selling and administrative expense was offset by a gross margin decline, a higher effective tax rate and growth in other expense.

Gross margin declined 180 basis points to 43.7%, primarily due to unfavourable changes in foreign currency exchange rates and, to a lesser extent, a higher mix of off-price sales.

Total revenues were flat at $9.1bn on both a reported and currency-neutral basis. Sales for the Nike brand reached $8.6bn, up 2% on a currency-neutral basis driven by growth in Greater China, Europe, Middle East and Africa (EMEA) and Asia Pacific and Latin America (APLA), including growth in sportswear.

Sales for Converse meanwhile, were down 16% to $483m, mainly driven by declines in North America.

In the group's North America business, sales slipped 3% to $3.92bn, while EMEA sales grew 4% to $2.34bn. Greater China sales, meanwhile, were up 9% to $1.11bn, and APLA sales increased by 5% to $1.19bn.

"This quarter, we captured near-term opportunities through our new Consumer Direct Offense," said CEO Mark Parker. "Looking ahead to the rest of fiscal 2018, we will ignite Nike's next horizon of global growth through the strength of our brand, the power of our innovative products and the most personal, digitally-connected experiences in our industry."

The company's so-called Consumer Direct Offense is fuelled by the brand's 'Triple Double' strategy: 2X Innovation, 2X Speed and 2X Direct connections with consumers. In essence, the new alignment aims to allow Nike to better serve its consumers personally, at scale – or what the company calls "creating a local business, on a global scale."

Earlier this month, the sporting giant said it is to make around 745 job cuts in its home state of Oregon as part of its restructure.

Nike speed-to-market shake-up sees 745 Oregon job cuts

FBR & Co analyst Susan Anderson, notes: "We like Nike's innovation pipeline, international runway, and long-term margin catalysts, but we remain on the sidelines and look for improved revenue growth, margin execution, and lower inventory growth."