Shares of Nike fell after hours Tuesday, following a mixed quarterly report where profits outpaced Wall Street's expectations despite revenue that came in shy of estimates.
The Oregon-based retailer reported earnings of 68 cents per share for the fiscal third quarter on total sales of $8.43 billion. Analysts were expecting Nike to report earnings of 53 cents on revenue of $8.47 billion, according to Thomson Reuters consensus estimates.
The stock fell nearly 4 percent after the market close Tuesday, dipping below $56 per share.
Revenue for the Nike brand were $7.9 billion for the quarter, up 7 percent on a currency-neutral basis and driven by growth in Western Europe, China and the emerging markets, along with Nike's Sportswear and Jordan Brand categories.
Competition from Under Armour and Adidas are increasingly pressuring Nike's business — particularly in the U.S. — and price hikes haven't been enough to make up for foreign exchange headwinds and increased sales at off-brand stores, the company said.
"[Many] factors have shifted consumer patterns ... in North America, impacting traffic, the economics of brick-and-mortar retail, and it's driving a more promotional environment in the near term," Chief Executive Mark Parker said on Tuesday's earnings call.
Parker said the company is going to "double down" on its efforts in innovation, the supply chain and the Nike marketplace, to drive success over the long term. Consumers today are responding to "simpler, more personal connections," as witnessed by an increase in sales made through the Nike mobile app this quarter, Parker said.
Moving forward, the company will adjust operations to meet changing customers' demands, respectively, CEO Parker added. "The more directly Nike engages with the consumer, the greater the return," he said, citing recent successes of "seamless commerce" at Nike's newly opened Soho and Miami stores.