Nike Profit Climbs 16%

(RTTNews) - Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, said Thursday after the markets closed that its third quarter profit rose 16% from last year, helped by higher revenue and improved gross margin.

The company's quarterly earnings per share also came in above analysts' expectations, but its quarterly revenue fell short of analysts' forecast.

"Our strong third quarter results show that our growth strategies are working, even under challenging macroeconomic conditions," said Mark Parker, Nike President and CEO.

Nike shares are currently gaining 1.71% in after hours trading after closing the day's regular trading session at $98.32, up 81 cents. The shares trade in a 52-week range of $70.60 to $99.76.

For the third quarter ended February 28, 2015, the Beaverton, Oregon-based company reported net income of $791 million or $0.89 per share, compared to $682 million or $0.75 per share for the year-ago quarter.

On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.84 per share for the third quarter.

Gross margin for the quarter improved to 45.9% from 44.5% a year ago, due to a continued shift in mix to higher margin products

Revenue for the third quarter rose 7% to $7.46 billion from $6.97 billion last year amid continued strong demand for Nike brands. However, that figure fell short of the $7.62 billion consensus estimate of 23 analysts. In constant currency, the company's third quarter revenue rose 13%.

The stronger U.S. dollar not only slowed the company's revenue growth, but also affected its futures orders. As of the end of the third quarter, the company's worldwide futures orders for Nike Brand athletic footwear and apparel scheduled for delivery from March through July rose 2%, or 11% excluding currency changes, from a year ago.

For the third quarter, Nike brand North America revenue rose 6% to $3.25 billion and Western Europe revenue surged 10% to $1.4 billion, while revenue from Central and Eastern Europe fell 10% to $319 million. Greater China revenue climbed 15% to $801 million but Japan revenue declined 6% to $166 million. Third quarter revenue from emerging markets grew 2% to $955 million.

Footwear revenue for the quarter rose 8% to $4.57 billion, while apparel revenue increased 3% to $1.96 billion.

During the third quarter, Nike repurchased 6.5 million shares of its common stock for about $612 million as part of the four-year, $8 billion program approved by the company's Board of Directors in September 2012. As of the end of the third quarter, a total of 74.1 million shares had been repurchased under that program for $5.3 billion.

Nike said last month that its Chief Financial Officer, Donald Blair, will retire from the company in October 2015. Blair has served as Nike CFO since 1999.

As part of a planned transition, Blair will remain in the CFO role through July 31, 2015, and will remain with the company through October 31, 2015 in support of the transition. Effective August 1, 2015, Blair will be succeeded by Andrew Campion, currently the company's Senior Vice President, Finance, Strategy and Investor Relations.