Bloomberg News

Nike’s Profit Tops Analysts’ Estimates as U.S. Sales Gain

June 27, 2011

(Updates with analysts’ estimates in second paragraph.)

June 27 (Bloomberg) -- Nike Inc., the world’s largest sporting-goods company, reported fourth-quarter profit that surpassed analysts’ estimates as sales climbed in North America.

Net income rose 14 percent to $594 million, or $1.24 a share, in the quarter ended May 31, from about $522 million, or $1.06, a year earlier, Beaverton, Oregon-based Nike said today in a statement. Analysts projected $1.17 a share, the average of 15 estimates compiled by Bloomberg.

Chief Executive Officer Mark Parker, facing higher costs for cotton, labor and transportation, has raised prices on some products and announced plans for further increases next year. Gross margin, the difference between sales and cost of goods, narrowed 3.1 percentage points in the quarter.

In March, Nike projected fourth-quarter gross margin would contract by at least 3 percentage points.

Orders for the Nike brand from June to November increased 12 percent, excluding currency fluctuations. That topped the average estimate of five analysts for a gain of 9.4 percent.

Total revenue rose 14 percent to $5.77 billion. Analysts projected $5.54 billion, the average of 13 estimates. Sales in North America, Nike’s largest market, advanced 22 percent to $2.1 billion.

Nike rose $3.11, or 3.8 percent, to $84.73 at 4:22 p.m., after the close of regular New York Stock Exchange composite trading. The shares had dropped 5 percent this year before today.

In March, Nike fell the most in two years after net income missed analysts’ estimates for the first time in 19 quarters as higher costs shrank the gross margin.

(Nike will hold an analyst meeting at 1 p.m. New York time tomorrow. To listen, visit NKE US <EQUITY> EVT <GO>.)

--Editors: Kevin Orland, James Callan.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net.


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