Nike misses quarterly sales estimates as demand tapers

(Reuters) -Nike missed Wall Street estimates for first-quarter sales on Thursday, fanning fears that demand for its sneakers is tapering amid tight consumer spending and increasing competition from newer brands.

U.S. consumers have sharply cut back on discretionary spending, which has also prompted wholesalers to place fewer orders, denting business in North America, the company’s largest market.

While Nike (NYSE:)’s wholesale business has been under pressure for a few quarters now, weakness is also hitting its direct-to-consumer business, which the company has heavily invested in, as it faces growing competition from newer sneaker brands such as On Running and Hoka.

Nike’s total revenue rose to $12.94 billion in the first quarter, from $12.69 billion a year earlier. Analysts had expected $12.98 billion, according to LSEG data.

The company’s net income fell to $1.45 billion in the quarter, from $1.47 billion a year earlier.