Nike Inc (NYSE:NKE) posted 24 percent increase in net income in the fiscal fourth quarter on lower tax charges and improved margins. Most of income was attributable to North America, but the company underperformed in international segment due to currency fluctuations. International segment marks an important growth area for the firm.
Global-orders of Nike outfits and footwear spiked 2%, including currency affects, well below from 11 percent increase in orders the firm recorded in a prior year period. Excluding the currency affects the orders eclipsed 13% from a year ago.
Although the firm’s sales were dragged down by currency fluctuations, still the firm reported 4.8 percent increase in its revenue growth. Sales jumped to $7.78 billion in the quarter ended May 31, compared to the $7.43 billion in a prior year period. Analyst had expected $7.7B. But the firm could have posted 13 percent increase in sales if excluding the volatility in currency rates.
Net revenue of footwear segment, the largest segment by sales, climbed 5% to $4.9 billion for the year.
The firm’s net profit spiked 24% to $865 million in the latest quarter. It reported diluted earnings per share of $0.98, more than analysts’ expectations for $0.86.
Gross margin improved to 46.2% from 45.6%, particularly due to high average selling prices.
The retailer is no doubt a dominant player in sports domain, providing footwear and apparels to different sports. Nike has also introduced styled footwear and clothes to athleisure consumers.
The firm has also been able to make a mark in female hearts through its new women’s-only retail store in Shanghai and London and conducted women’s road races. Wholesale orders for Nike women’s products increased 15% to $5.7 billion in the latest quarter compared to a prior-year quarter.
Nike donated lot of money to demand creation expense activities, including advertising and sports supportive events specifically arranged for high-profile athletes and teams. Nike’s such spending decreased by 6.5% to $819 million, especially due to large spending by firm in last year’s Football World Cup.
Nike has made a deal with NBA earlier this month. The vendor will sponsor its branded clothes to NBA league starting in the 2017-2018. Both parties are bonded in an eight-year deal valued at as much as $1 billion. The firm has already providing its Nike and Jordan branded shoes to more than 90% of the U.S. basketball shoe market.
