Nike Results Top Estimates

(RTTNews) - Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, said Thursday after the markets closed that its fourth quarter net profit rose a modest 5% from last year, as higher marketing expenses for the FIFA soccer World Cup dented an 11% revenue growth.

The company's quarterly earnings per share came in above analysts' expectations as did its quarterly revenue.

Nike President and CEO Mark Parker said, "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 shares are currently gaining 3.70% in after hours trading after closing the day's regular trading session at $76.86, up 39 cents. The shares trade in a 52-week range of $60.18 to $80.26.

For its fourth quarter ended May 31, 2014, the Beaverton, Oregon-based company reported reported net income of $698 million, compared to $662 million for the year-ago quarter.

Earnings per share for the fourth quarter was $0.78, compared to earnings per share from continuing operations of $0.76 in the prior year quarter, which also had a loss from discontinued operations of $28 million or $0.03 per share.

On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.75 per share for the fourth quarter.

Gross margin for the quarter improved to 45.6% from 43.9% a year earlier, due to higher average prices and continued growth in the higher margin Direct to Consumer business, partially offset by higher product input costs and unfavorable foreign exchange rates.

Selling and administrative expense for the quarter surged 21% to $2.4 billion, with demand creation expense up 36% driven by marketing support for the World Cup and key product initiatives.

Revenue for the fourth quarter rose 11% to $7.43 billion from $6.70 billion in the same quarter last year. Twenty-three analyst had a consensus revenue estimate of $7.34 billion for the fourth quarter.

For the fourth quarter, the company's North America revenue rose 10% to $3.3 billion, while Western Europe revenue surged 25% to $1.3 billion and revenue from Centra and Eastern Europe increased 7% to $370 million. Greater China revenue grew 4% to $702 million, but Japan revenue fell 7% to $226 million. Fourth quarter revenue from emerging markets rose 9% to $1.1 billion.

Footwear revenue for the quarter rose 12% to $4.4 billion, while apparel revenue also increased 12% to $2.1 billion.

As of the end of the fourth quarter, worldwide futures orders for Nike Brand athletic footwear and apparel scheduled for delivery from June through November totaled $13.3 billion, up 11% from a year ago.

During the fourth quarter, Nike repurchased 12.3 million shares of its common stock for about $912 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 fiscal 2014, the company has purchased a total of 51.9 million shares under that program for about $3.4 billion.