NEW YORK (

TheStreet

) --

Nike

(NKE) - Get Report

shares continued to to descend on Friday, following disappointing third-quarter earnings report.

During the quarter, Nike earned $1.08 a share on revenue of $5.1 billion. Analysts were calling for a profit of $1.11 on revenue of 5.18 billion.

This is the first time Nike has missed quarterly expectations since 2006.

Gross margin fell 110 basis points to 45.8%, due to higher product costs, elevated freight costs and a smaller proportion of license revenue due, in part, to the conversion of Converse's U.K. business to direct distribution.

Nike started raising prices on select merchandise last year, and the company said it will enact widespread increases in the first half of next year to combat cost inflation.

The sports apparel retailer also addressed its Japanese business, stating that while it is too early to asses the damage, the company does anticipate a negative impact on revenues and profits in the region. Nike had been struggling in Japan even prior to the tragedy that stuck last week.

Futures orders, excluding currencies, grew 9% year-over-year. The number also missed analysts estimates of a 9.8% gain.

Shares of Nike have plunged 9.2% to $77.52 in Friday morning trading.

--Written by Jeanine Poggi in New York.

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