Nike, Inc. (NYSE:NKE) is the dominant player in the sports apparel industry, but the company's stock price has been going nowhere for more than a year. At the Q2 earnings release conference in December 2016, CFO Andy Campion provided guidance of mid-single-digit growth for the next quarter along with flat "futures" (wholesale) orders growth for the rest of the fiscal year:
At the Q2 2017 conference call:
Futures orders are flat versus prior year on a reported basis. As you know, futures orders growth and reported revenue growth have become increasingly less correlated. That lesser correlation is evidenced by the roughly 5 percentage-point disparity between our guidance for Q3 reported revenue growth and our futures growth on a reported basis.
The longer-term, more systemic drivers of the disparity include: first, impacts related to our evolving DTC versus wholesale business mix. For example, DTC futures are reported on a wholesale- equivalent basis. However, reported revenue for DTC is recognized based upon the full retail price to consumers. Therefore, as the mix of futures shifts towards DTC, Nike's overall reported revenue impacts will inherently grow faster than futures.