ISTANBUL

Nike shares were down 10.5% in Friday's pre-market trading as concerns over its bad performance in China outweighed the sportswear giant’s higher-than-expected earnings in the fiscal second quarter.

Nike reported quarterly earnings and revenue that exceeded market expectations on Thursday, with a decline in sales in China offset by an increase in North America.

The company's fiscal second-quarter revenues increased 1% on a reported basis, while earnings per share fell 32% year-on-year to $0.53.

The sportswear retailer reported a 9% increase in North American revenues to $5.63 billion. However, its Greater China business saw a 17% decline in revenue to $1.42 billion.

As worries over Nike's performance spread to businesses across the Atlantic, shares of German athleisure behemoths Adidas and Puma also saw a little decline on Friday morning.

Nike anticipates a modest increase in North America and a low single-digit decline in fiscal third-quarter revenues. Additionally, it projects a 1.75 to 2.25 percentage point decline in gross margins, including a 3.15 percentage point impact from tariffs.

During the quarter, according to the firm, wholesale revenues increased by 8% to $7.5 billion. However, direct sales dropped 8% to $4.6 billion.

Tariffs have also had an impact on Nike. It said on Thursday that increased tariffs were the main cause of the 3% decline in inventory and the 3 percentage point dip in gross margin.

Nike shares were already down more than 13% this year-to-date at Thursday’s close.