Nike Q3 Profit Tops Wall Street View - Update

(RTTNews) - Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, Thursday said its third-quarter profit trumped Wall Street estimates, while revenues came in line with expectations.

Beaverton, Oregon-based Nike reported third-quarter profit of $1.10 billion or $0.68 per share, compared with last year's loss of $921 million or $0.57 per share. On average, 28 analysts polled by Thomson Reuters expected earnings of $0.65 per share for the quarter.

The company said profit growth was driven largely by strong revenue growth and gross margin expansion, partially offset by higher selling and administrative expenses. Last year's bottom line reflects higher tax expenses related to the tax reforms.

Revenues for the quarter rose 7 percent to $9.61 billion from $8.98 billion last year. Analysts had a consensus revenue estimate of $9.61 billion for the quarter.

Revenue growth was driven by broad-based strength across all geographies as well as NIKE Direct, led by digital, the company said in a statement.

"In Q3, our team once again drove strong, healthy growth across NIKE's complete portfolio," said CEO Mark Parker said. "Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital consumer experiences around the world."

Gross margin rose to 130 basis points to 45.1 percent, driven mainly by higher average selling prices and favorable foreign exchange rates, partially offset by higher product costs.

Revenues for the Nike Brand were $9.15 billion, up 8 percent, while Converse were $463 million, down 4 percent.

NKE closed Thursday's trading at $88.01, up $1.32 or 1.52%, on the NYSE. The stock, however, slipped $2.88 or 3.27% in the after-hours trade.