Just did it: Nike tops analysts' estimates
Nike, the world's largest sporting-goods company, posted fiscal fourth-quarter profit that topped analysts' estimates as running shoes propelled revenue gains in the US.
Net income in the quarter ended May 31 rose 22pc to $668m (€513m), or 73 cents a share, from $549m, a year earlier, Beaverton, Oregon-based Nike said. That beat market forecasts.
Nike has been benefiting from increasing demand for running and basketball gear in North America as revenue in its largest market surged 12pc. In China, by contrast, consumers have shunned apparel that didn't have the proper sophistication or fit, forcing Nike to use discounts. Still, worldwide sales gained 7.4pc to $6.7bn.
"It's a good quarter but not a blowout," said Chris Svezia, an analyst for Susquehanna Financial Group in New York.
Orders for the Nike brand from June to November, excluding the effects of currency exchange-rate changes, advanced 8pc.
Nike, which counts the likes of Cristiano Ronaldo and Wayne Rooney among its athletes, has been trying to improve profitability amid higher costs for materials and labour, mostly in China.
To combat that, the company raised prices last year and has been cutting waste out of its supply chain. It also sold off the underperforming Cole Haan and Umbro brands last year.
As a result, gross margin, or the percentage of sales left after subtracting the cost of goods sold, widened to 43.9pc from 42.8pc a year earlier.
That marked the second straight gain after nine consecutive declines. The company forecast an expansion of 0.5pc. (Bloomberg)