Nike Profit Tops Forecasts on Strong Overseas Sales
Nike reported a third-quarter profit that easily beat expectations, helped by strong international sales, especially in Asia, of shoes and clothing.
The world's largest maker of athletic footwear and apparel said a weak dollar helped contributed to the 16 percent gain in third-quarter sales, while fatter margins and lower costs boosted profit.
Earnings increased to $463.8 million, or 92 cents per share, from $350.8 million, or 68 cents per share, a year earlier. Total sales jumped 16 percent to $4.5 billion.
A consensus forecast of analysts had put Nike's profit for the most recent quarter at 81 cents a share. The sales forecast stood at $4.36 billion.
Gross margins rose to 45.1 percent of sales from 44.2 percent, while costs fell to 30.9 percent of sales from 31.7 percent. The company also benefited by a slightly lower tax rate.
Global orders for delivery of shoes and apparel from now until July rose 11 percent, Nike said. Goldman Sachs was looking for an increase of 10.5 percent.
While futures orders abroad saw the healthiest growth, they rose a mere 1 percent rise in the United States.
The company has seen rapid growth in emerging markets for its Nike footwear as it ramps up for the Beijing Olympics and robust demand for its smaller, non-Nike brands. It claims sports items are relatively immune to economic downturns, but has been controlling inventory in a challenging U.S. marketplace as athletic shoe retailers struggling.
Nike shares leaped about 6 percent at more than $65.50 in extended trading Wednesday. Shares are up 14 percent over a year ago.
Shares of Nike traded at 15 times fiscal 2009 earnings at a premium to its largest competitor, German brand Adidas, trading at over 10 times for the same period.
- Reuters contributed to this report.