Nike Q4 Profit Drops, Stock Down 6%

(RTTNews) - Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, Tuesday said its fourth-quarter profit dropped 2 percent from a year ago, hurt largely by lower-than-expected revenues and weak margins. Shares of the company slipped over 6 percent in the after-hours trading.

Beaverton, Oregon-based Nike's fourth-quarter profit dropped to $846 million or $0.49 per share from $865 million or $0.49 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter.

Revenues for the quarter rose 6 percent to $8.24 billion from $7.78 billion last year. Revenues were up 9 percent on a currency neutral basis. Analysts had a consensus revenue estimate of $8.28 billion for the quarter.

Gross margin declined 30 basis points to 45.9 percent, as higher average selling prices were offset by higher production costs, unfavorable changes in foreign currency exchange rates, and the impact of clearing excess inventory in North America. Selling and administrative expense increased 7 percent to $2.8 billion.

Nike brand North America revenues were flat at $3.74 billion, while Western Europe rose 19 percent to $1.50 billion and Central and Eastern Europe declined 4 percent to $345 million. Greater China jumped 18 percent to $979 million and Japan revenue increased 22 percent to $280 million. Revenues from emerging markets declined 7 percent to $872 million.

Worldwide futures orders for NIKE Brand athletic footwear and apparel improved 8 percent to $14.9 billion. The future orders are up 11 percent higher on a currency neutral basis, but below the 12 percent expected by Wall Street analysts. Futures orders are closely watched by investors as a benchmark for demand for Nike products.

NKE closed Tuesday's trading at $53.09, up $1.20 or 2.31%, on the NYSE. The stock, however, dropped $3.40 or 6.40% in the after-hours trade.