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Nike gains as Q4 results beat on strong North America and Western Europe business

Published: 08:50 27 Jun 2014 EDT

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NIKE Inc. (NYSE:NKE) advanced in pre-market trading after the world’s largest sporting-goods maker posted better-than-expected profit and revenue in its fiscal fourth quarter on strong demand for its apparel and footwear in North American and Western Europe.

Shares rose 2.8 percent to $79.01 at 8:20 p.m. in New York. The stock had lost 2.3 percent since the beginning of the year through yesterday.

Net income rose 5.4 percent to $698 million, or 78 cents per share, in the three-month period ended May 31, from $662 million, or 73 cents per share, a year ago, the Beaverton, Oregon-based company said in a statement yesterday. Wall Street was looking for 75 cents per share.

Sales rose 11 percent to $7.43 billion. Analysts on average predicted $7.34 billion.

“These results demonstrate the energy and excitement NIKE brings to the market,” Chief Executive Officer Mark Parker said in the statement. “Our ability to relentlessly innovate for consumers drove our growth in FY14, and will continue to fuel it for years to come. And as we grow, we remain focused on managing all areas of our business to drive sustainable, profitable growth for our shareholders.”

NIKE is benefiting from consumers increasingly buying athletic apparel and gear for everyday wear, not just when working out or playing sports. 

NIKE gets more than half of its total revenue from North America and Western Europe. Revenue from North America rose 10 percent in the fourth quarter ended May 31, while revenue from Western Europe jumped 18 percent, excluding the impact of currency fluctuations.

The company has been giving tough competition to Germany's Adidas AG (OTCMKTS:ADDYY) on the hotly-contested European turf. NIKE maintained its share of the Western Europe sportswear market at about 12 percent in 2013, while Adidas's share shrank to 12.6 percent in the year from 13.2 percent in 2012, Bloomberg reported, citing Euromonitor International data.

The soccer World Cup, hosted by Brazil, marks the first time that NIKE is sponsoring more national teams than Adidas.

Revenue from NIKE’s Greater China division increased 3.5 percent to $702 million. The company had been struggling to maintain growth in China, its second-largest market, as shoppers there became choosier about which brands they buy. Futures orders in the unit advanced 6 percent.

Moving forward, NIKE said it expected "tremendous energy" around the World Cup to help its first-quarter revenue grow in low double digits in percentage terms, including the impact of currency fluctuations.

 

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