Athletic-apparel giant NIKE Inc. (NKE) Monday reported its fourth-quarter results, with profit beating Wall Street view, helped by higher-than-expected revenue growth, as strong demand in Europe helped the company offset lower sales in China.
Beaverton, Oregon-based Nike’s fourth-quarter profit rose to $1.44 billion or $0.90 per share from $1.51 billion or $0.93 per share last year. On average, 24 analysts polled by Thomson Reuters estimated earnings of $0.81 per share for the quarter. Analysts’ estimates typically exclude one-time items.
Fourth-quarter revenues dropped slightly by 1% to $12.23 billion from $12.34 billion last year. However, revenues were above analysts’ consensus estimate of $12.07 billion for the quarter.
NIKE Direct sales were $4.8 billion, up 7 percent on a reported basis, driven by by 25 percent growth in EMEA, 43 percent growth in APLA and 5 percent growth in North America, partially offset by a decline in Greater China. NIKE Brand Digital sales increased 15 percent.
Gross margins for the quarter decreased 80 basis points to 45.0 percent, primarily due to higher inventory obsolescence reserves in Greater China and elevated freight and logistics costs.
In June, the Board of Directors authorized a new four-year, $18 billion program to repurchase shares of NIKE’s Class B common stock. The company’s new program will replace the current $15 billion share repurchase program, which will be terminated in fiscal year 2023.
NKE closed Monday’s trading at $110.50, down $2.41 or 2.13%, on the NYSE. The stock, however, gained $0.62 or 0.56%, in the after-hours trading.
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