Nike shares slipped 1.5 percent Wednesday, hours after the athletic wear company reported a low-quality earnings beat and weak future order numbers in the fiscal first quarter.
But while its business has been challenged by the resurgence at Adidas and consolidation in the sporting goods space, Wall Street may be putting too much emphasis on its so-called futures orders. That number refers to orders placed by wholesale customers that were not delivered during the quarter, and have traditionally been considered a proxy for future demand.
Nike futures fell shy of Wall Street's estimate for 8 percent growth, excluding currency swings, rising 7 percent. That compares to an 11 percent increase in the fourth quarter. Future orders in North America grew at their worst rate in more than six years, ticking just 1 percent higher. That region accounts for about half of Nike's revenue.
On a call with investors following its earnings report, Nike management downplayed the importance of its futures number, saying it's becoming a less important metric for gauging the health of its brand. That's partly because a larger percentage of its business is starting to occur in its own stores and at Nike.com. As a result, the company will no longer break out this figure in its earnings release, and will instead outline it on a call to provide additional context.
"We expect North America's reported revenue growth over the balance of the year to outpace the rate of futures growth," CFO Andy Campion said, pointing analysts toward the company's guidance for high-single-digit revenue growth this fiscal year.
"The most important thing to look at, I think, is the sales guidance," Morgan Stanley analyst Jay Sole told CNBC.