Nike Profit Climbs 20%, But Revenue Misses Street

(RTTNews) - Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, Wednesday said its third-quarter profit rose 20 percent from a year ago, driven largely by higher revenues and a lower effective tax rate. The company's quarterly earnings trumped analysts' estimates, but its revenues fell short.

Beaverton, Oregon-based Nike's third-quarter profit rose to $950 million or $0.55 per share from $791 million or $0.45 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.49 per share for the quarter.

Revenues for the quarter rose 8 percent to $8.03 billion from $7.46 billion last year. Revenues were up 14 percent on a currency neutral basis. Analysts had a consensus revenue estimate of $8.20 billion for the quarter.

Gross margin were flat with last year's 45.9 percent, as higher average selling prices and continued growth in the higher margin Direct to Consumer business were offset by unfavorable changes in foreign currency exchange rates, higher warehousing costs, and the impact of clearing excess inventory in North America.

Nike brand North America revenues rose 13 percent to $3.68 billion, while Western Europe rose 2 percent to $1.44 billion and Central and Eastern Europe grew 12 percent to $359 million. Greater China jumped 23 percent to $982 million and Japan revenue increased 23 percent to $205 million. Revenues from emerging markets declined 8 percent to $879 million.

NKE closed Wednesday's trading at $64.90, up $0.18 or 0.28%, on the NYSE. The stock further dropped $1.60 or 2.47% in the after-hours trade.