Cue the Crying Jordan meme. Nike shares fell 6% in early trading Wednesday after the athletic apparel giant reported sales for its most recent quarter that missed Wall Street's forecasts.
Nike (NKE), which has basketball legends Michael Jordan and LeBron James in its arsenal of celebrity endorsers, said late Tuesday that its total revenue was up just 5% in the quarter.
Investors are particularly worried about sluggish sales in North America, which accounts for about 45% of the company's overall revenue. Sales in North America grew at just a 3% pace in the quarter compared to last year.
The company's outlook wasn't that great either. Nike said on its conference call with analysts that it expects sales growth to slow a bit this quarter. And futures orders, a measure investors look at as a proxy for sales during the next few quarters, were down 4%.
Nike has been faced with tougher competition from a resurgent Adidas (ADDDF). But another of Nike's key rivals, Under Armour, has been struggling lately too.
Under Armour (UA), which has Golden State Warriors star Steph Curry as its key spokesman, has plunged 30% this year.
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Nike is still growing rapidly in emerging markets as well as Asia. Sales in Nike's emerging markets segment rose 8% in the quarter. And they were up 9% and 15% in China and Japan respectively.
But it appears that the weak environment for retailers in the U.S., many of which are struggling to compete against Amazon (AMZN) and Walmart (WMT), is hurting Nike.
Sears (SHLD), for example, has just warned in a regulatory filing that it may not be able to stay in business. Macy's (M), Target (TGT) and Kohl's (KSS), which has a big partnership with Under Armour, are all struggling as well.
So is JCPenney (JCP), which announced a deal with Nike earlier this year that will let Nike run small Nike shops in JCPenney outlets.
During a conference call with analysts Tuesday evening, Nike CEO Mark Parker conceded that the shift to digital commerce is also impacting Nike.
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Parker said that "the economics of brick-and-mortar retail" is one of the factors that "is driving a more promotional environment in the near term."
He added that "the retail landscape, particularly in the U.S., is not in a steady state. I think that's obvious."
One of Nike's key retail partners, sporting goods giant Dick's (DKS), reported weak results earlier this month. Another athletic apparel retailer, Finish Line (FINL), has been struggling lately as well. Both stocks have plunged more than 10% so far this year.
Nike's problems even helped bring down the broader market. The company is one of the 30 members of the Dow and its drop Wednesday was one of the main reasons why that blue chip index was set to head lower for a fifth straight day.
Nike was the worst performing stock in the Dow last year, falling nearly 20%.