Nike's stock fell several points from an all-time high of more than $136 in Wednesday trading, despite revealing it had exceeded projections for earnings in its fiscal second quarter of 2016. Nike's earnings per share in Q2 was $0.90, a 22 percent increase from this time a year ago and above analyst forecasts of $0.86 per share, according to Investor Place.
Numbers were strong for the sportswear retailer all across the board.
Nike Futures orders were up 20 percent, going beyond the expected 13.6 percent. Its noted that orders for the sneaker is important for Nike since most of its retailers get the best discount on clothing ordered at least roughly 90 days before it is delivered to stores.
Internationally, Nike posted strong numbers as well. Total sales in China, regarded as one of the most important markets for the company, rose 28 percent while direct-to-consumer sales rose 51 percent, reported Fox News. Sales in Western Europe followed a similar trend, going up 12 percent.
Futures also did noticeably well in China with orders jumping 34 percent, well beyond the forecasted 22 percent.
The only area Nike didn't perform as well as expected was in total revenue, which came in at $7.7 billion, falling short of the expected $7.8 billion, reported Business Insider. In its earnings announcement, Nike argued that currency adjustments caused the company's 4 percent revenue growth to be negatively impacted by 8 percent.
Despite a strong showing this quarter, stock fell because of investor concerns over rising inventory level, which stands at $4.6 billion. Due partly to an increase in average pricing points and a rise in direct-to-consumer sales, against sales of third party retailers, inventories have surged by 11 percent within a three-month period. The U.S., in particular, has seen an 8 percent increase in wholesale product inventories, leaving investors worried that retailers will have too much in their inventory, thus leading to markdowns, which can eat into profits.
Nike has been the Dow Jones Industrial Average's best performing stock this year, with its shares up about 35 percent for all of 2015.
