Nike shares retreat the most in two weeks on Tuesday, company’s quarterly revenue falls short of expectations

Nike Incs (NKE) revenue had fallen short of market expectations during the third quarter ended on February 28th, actual figures showed on Tuesday, with the worlds largest footwear producer facing fierce competition in North America from rival Adidas AG and a momentum-gaining Under Armour Inc.

Nike shares registered their largest daily slump since March 3rd on Tuesday. The stock went down 1.14% ($0.67) to $58.01, after touching an intraday high at $59.00, or a price level not seen since September 2nd 2016 ($59.18). In the week ended on March 19th the shares of the athletic apparel manufacturer added 2.43% to their market value compared to a week ago, which marked the first gain in the past three weeks and also the best performance since the week ended on February 12th. The stock has pared its advance to 1.49% so far during the current month, following an 8.05% surge in February. The latter has been a third consecutive monthly gain and also the best performance since September 2015. For the entire past year, Nike shares lost 18.67%.

Total revenue was reported to have increased 5% to $8.43 billion during the quarter ended on February 28th. In comparison, the median forecast by analysts had pointed to a revenue of $8.47 billion, according to Thomson Reuters I/B/E/S.

Without taking into account currency exchange rate fluctuations, Nikes total revenue grew 7% during the quarter.

The company earned $0.68 per share during the reported period, which exceeded the median estimate by analysts ($0.53).

According to yesterdays report, recent US Dollar appreciation as well as off-price sales led to a 140-basis point decrease in Nikes gross margins to 44.5% during the quarter.

Sales in North America, the athletic apparel manufacturers largest market, were reported to have risen 3% in the three-month period ended on February 28th, while those in Greater China went up 9%. On the other hand, on a currency-neutral basis, Nikes sales in the Greater China area grew 15%.

According to the footwear manufacturer, its global orders for delivery, also known as “futures orders”, shrank by approximately 4% during the period. On a currency-neutral basis, however, the drop in this metric was lower – 1%. In comparison, according to research firm Consensus Metrix, the median forecast by experts had pointed to a 3.5% growth in “futures orders”.

“A lot of the concern about Nike is its growth in a competitive environment. Three to five years ago, a competitive environment (for Nike) was almost non-existent and the market was moving towards athleisure,” Brian Yarbrough, Edward Jones analyst, said in a reference to the expanding presence of firms such as Adidas and Under Armour in the US market.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the Nike stock are presented as follows:

R1 – $58.13
R2 – $58.24
R3 (Range Resistance – Sell) – $58.36
R4 (Long Breakout) – $58.71
R5 (Breakout Target 1) – $59.13
R6 (Breakout Target 2) – $59.30

S1 – $57.89
S2 – $57.78
S3 (Range Support – Buy) – $57.66
S4 (Short Breakout) – $57.31
S5 (Breakout Target 1) – $56.89
S6 (Breakout Target 2) – $56.72

By using the traditional method of calculation, the weekly levels of importance for Nike Inc (NKE) are presented as follows:

Central Pivot Point – $57.31
R1 – $58.50
R2 – $59.21
R3 – $60.40
R4 – $61.60

S1 – $56.60
S2 – $55.41
S3 – $54.70
S4 – $54.00