UPDATE: Goldman Sachs Color On NKE Downgrade

Goldman Sachs, which downgraded shares of Nike NKE, is providing some color on the stock.

“3Q11 EPS of $1.08 missed $1.12 consensus, with sales and gross margin falling short,” Goldman Sachs writes. “Drivers (timing of cost pressures vs. price increases, normalization of cancellation rates versus unusually low levels last year when retailers chased aggressively), should be mainly transitory, but they will likely remain surprisingly large headwinds for several quarters - likely weighing on gross profit growth and the share price over the 6-month horizon that typically underpins our athletic / apparel ratings.

“We see NKE as an attractive long-term investment, but for now we downgrade to Neutral from Buy.”

Nike closed Thursday at $85.41.