Dive Brief:

• Nike reported Tuesday that its fiscal Q3 revenues rose 8% to $8 billion, up 14% on a currency neutral basis but missing Wall Street estimates of $8.2 billion, according to S&P Global Market Intelligence.

• Nike brand Q3 revenues increased to $7.6 billion, up 15% on a currency neutral basis, which the company said was driven by growth in every geography and nearly all key categories. Revenues for its Converse brand in the period were $489 million, down 5% on a currency neutral basis.

• Q3 gross margin was 45.9%, flat year over year, on higher average selling prices and continued growth in the higher-margin direct-to-consumer business that were offset by unfavorable foreign currency exchange rates, higher warehousing costs and the impact of clearing excess inventory in North America. Excluding the impact of the strong dollar, Nike's future orders rose 16.1%, missing expectations for 17% growth, and Nike's future orders in North America rose 10%, missing estimates for 11.6% growth.  

Dive Insight:

Nike is facing stiff competition these days. Rivals Under Armour and Adidas are benefiting from the current spikes in sportswear sales to people who aren’t necessarily athletes (the so-called athleisure movement), as are other apparel companies that don’t usually compete in the space. And Nike's footwear, long a reason for its dominance, also faces challenges from UA, which has increasingly attracted big-name athletes and teams. 

But Nike just made a move to undermine Under Armour's momentum, hiring away Dave Dombrow, UA’s SVP of design, who most notably helped develop UA’s breakout Stephen Curry shoe line, named for the Golden State Warriors' star point guard, as well as a series of successful UA running shoes.

In the meantime, Nike’s miss on future orders is of special concern for investors, and is an indication that retailers may not be opting for Nike products at their previous levels. 

“In the third quarter, Nike delivered robust and balanced growth across our expansive, powerful portfolio,” president and CEO Mark Parker said in a statement. “We grow by serving the athlete personally every day and, as we unveiled last week, through breakthrough innovation that gives us a foundation for growth for years to come. Combined with our strategic investments, world-class execution and financial discipline, Nike consistently delivers value to our shareholders.”