Nike Stumbles Following Earnings Miss
Nike (NKE) shares were stumbling after hours on Thursday after the sports apparel company reported fourth quarter earnings that missed analyst expectations.
Nike shares were down 0.79% to $83.00 on Thursday and are up about 12% so far this year.
The Beaverton, OR-based company reported earnings of 62 cents per share, falling short of analysts estimates of 66 cents per share. The company reported a 4% increase in revenue to $10.2 billion, just ahead of analysts’ $10.16 billion expectations.
“FY19 was a pivotal year for NIKE as we continue to bring our Consumer Direct Offense to life throughout the marketplace,” said Mark Parker, Chairman, President and CEO, NIKE, Inc. “Our distinctive innovation and digital advantage led to accelerated growth across our complete portfolio, while our Brand fueled deeper relationships with consumers around the globe.”
The company reported an 80 basis point increase in its gross margin to 45.5% thanks primarily to higher average selling prices. But the company also reported a 9% increase in administrative and selling expenses to $3.4 billion while demand creation expense rose 3% to $1 billion.
“Reflecting on our FY19 performance, it is clear that growth is paramount at NIKE, and that our strong growth is being driven by strategic transformation,” said Andy Campion, Executive Vice President and CFO, NIKE, Inc. “Amid foreign exchange volatility, our double-digit currency-neutral revenue growth and expanding ROIC showcase NIKE’s unrivaled ability to create extraordinary value for consumers and shareholders over the long term.”