Nike Q3 Results Beat Wall Street; Shares Up 5%

(RTTNews) - Shares of Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, gained about 5 percent in extended trading hours on Thursday after the company reported a third-quarter profit and revenues that trumped Wall Street estimates.

Beaverton, Oregon-based Nike reported third-quarter loss of $921 million or $0.57 per share, compared to profit of $1.14 billion or $0.68 per share last year.

During the quarter, as a result of enactment of the Tax Act, the company recorded additional income tax expense of $2.0 billion. The impact of the hefty tax charge reduced earnings by $1.25 per share.

Analysts polled by Thomson Reuters expected earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter rose 7 percent to $8.98 billion from $8.43 billion last year. Analysts had a consensus revenue estimate of $8.85 billion for the quarter.

"NIKE's Consumer Direct Offense drove strong double-digit growth across our international geographies, led by Greater China," said Mark Parker, Chairman, President and CEO, NIKE, Inc. "As we close Q3, we now see a significant reversal of trend in North America, as momentum accelerates through the scaling of new innovation platforms and differentiated NIKE Consumer Experiences expand across the marketplace."

Gross margin declined to 70 basis points to 43.8 percent, hurt largely by unfavorable foreign exchange rates.

Revenues for the NIKE Brand were $8.5 billion, up 4 percent on a currency-neutral basis, driven by Greater China, EMEA and APLA, including double-digit growth in NIKE Direct and growth in Sportswear and NIKE Basketball.

Revenues for Converse were $483 million, down 8 percent on a currency-neutral basis, as international and digital growth were more than offset by declines in North America.

NKE closed Thursday's trading at $64.42, down $1.93 or 2.91%, on the NYSE. The stock, however, gained $3.18 or 4.94% in the after-hours trade.