Nike Q4 Profit Rises 12% On Strong Overseas Sales
RTTNews) - Footwear and apparel maker Nike Inc. (NKE: News, Chart, Quote ) Wednesday reported an increase in fourth-quarter earnings as revenues rose 16% primarily due to double-digit sales growth in Europe and Asia Pacific, combined with favorable exchange rates. Earnings increased 14% and topped analysts' expectation. Shares of Nike dropped more than 5% in the extended trading session on the NYSE.
Nike's fourth-quarter net income increased 12% to $490.5 million from $437.9 million and earnings per share rose 14% to $0.98 from $0.86 in the last-year quarter. On average, nine analysts polled by First Call/Thomson Financial expected the company to report earnings of $0.96 per share. Revenues for the quarter advanced 16% to $5.09 billion from $4.38 billion in the same period last year. Eight Street analysts had a consensus revenue estimate of $4.95 billion for the quarter.
U.S. revenue for the quarter increased 4% (nur !) to $1.7 billion from $1.6 billion and revenue from the European region grew 19% to $1.5 billion from $1.3 billion in the year-ago quarter. Revenue from the Asia Pacific region rose 39% to $828.0 million from $596.9 million, while revenue from the Americas region increased 30% to $306.6 million from the comparable quarter a year earlier.
The Beaverton, Oregon-based Nike recorded gross margin of $2.33 billion or 45.8% revenues for the fourth quarter, up from $1.92 billion or 43.8% of revenues in the prior-year quarter.
Mark Parker, CEO of NIKE commented, "The power and strength of the Nike brand as well as the depth and diversity of the NIKE, Inc. portfolio produced solid sales growth across all geographies and key product platforms. By continuing to deliver compelling consumer experiences, backed by strong operational execution, we're confident we can deliver long-term profitable growth and create value for our shareholders."
Earlier this week, Caris & Co boosted its price target on Nike from $65 to $75, and reiterated its "Above average" rating on the company's shares. In a research note published Monday, analyst Claire Gallacher said the company is likely to post fourth quarter revenue growth at 11%, with benefits associated with clean inventories and favorable currency trends more-than-offsetting manufacturing cost pressures. Adding that Nike's high-end products continue to generate robust sell-through across distribution channels, the analyst added that the company is navigating a challenging global economy better than its peers.
Credit Suisse also raised its price target for the company in late May, upwardly adjusting its target from $75 to $85 and reaffirming it's "Outperform" rating. Net income for fiscal 2008 climbed to $1.88 billion or $3.74 per share form $1.49 billion or $2.93 per share in the previous year. Annual revenues increased 14% to $18.63 billion from $16.33 billion last year. Analysts expected the company to report earnings of $3.65 per share on revenues of $18.46 billion for the year.
The company said its worldwide futures orders for athletic footwear and apparel, to be delivered from June 2008 through November 2008, increased 11% to $8.8 billion from last year. Future orders for the U.S. were flat with last year, while future orders for Europe, Asia Pacific and the Americas increased 10%, 31% and 30%, respectively.
The company repurchased about 4.45 million shares for about $290 million during the quarter, in conjunction with its four-year, $3 billion share repurchase program.
Shares of NKE dropped $3.48 or 5.28% in Wednesday's after-hours session on the NYSE, trading at $62.49. The stock has been moving in a range of $51.50 to $70.60 in the past twelve months, with a three-month average volume of around 3.50 million shares.
by RTT Staff Writer