Nike Beats Street Despite Difficult U.S. Athletic Shoe Market
Nike posted higher fourth-quarter net profit Tuesday, beating Wall Street estimates and sending shares up 4% in extended trade, as strong sales of Nike-branded footwear helped offset overall challenges in the U.S. athletic shoe market.
The world's top maker of athletic shoes and apparel said quarterly net profit rose 32% to $437.9 million, or 86 cents per share, compared with $332.8 million, or 64 cents per share, a year earlier. Revenue rose 9% to $4.38 billion.
Excluding items, earnings were 90 cents a share. That beat analysts' average expectations of earnings of 86 cents, excluding items, on revenue of $4.36 billion, according to Reuters Estimates.
Beaverton, Oregon-based Nike said that global futures orders for delivery of footwear and apparel from June through November rose 12%.
In the United States, future orders rose 7%, Nike said. That compares to the 5% expected by Goldman Sachs and the low- to mid-single digits growth projected by Susquehanna Financial. In the year-ago period, Nike's U.S. forward orders rose 9%.
Favorable currency exchange rates boosted revenue growth by 2 percentage points, Nike said.
The results appeared to allay some concern over sluggishness in the U.S. athletic shoe market. Nike's two largest U.S. customers, Foot Locker and Finish Line, have experienced weakness in same-store sales.
Nike has been working on store initiatives to help its retail partners and has offered shoes at a broader range of price points to appeal to cost-conscious shoppers.
Shares of Nike trade at over 16 times expected 2008 earnings, at a premium to the multiple paid for German rivals Adidas AG and Puma AG, at nearly 14 and 16 times forward-looking earnings, respectively. Nike shares are up 10% since the beginning of the year.