Nike Inc. announced its financial results for the first quarter on Tuesday. The company posted better-than-expected earnings, but an insignificant rise in gross margins and no change in its 2019 outlook disappointed few investors, sending its shares down nearly 3 percent in the after-hours trading session.
The Beaverton, Oregon-based company said that its gross margins jumped 50 basis points to 44.2 percent in the latest quarter, matching consensus forecast.
The company’s direct-to-consumer model helped it to register a revenue growth of 6 percent in North America during the latest quarter, marking a rise for the second straight quarter.
Speaking to analysts on a post-earnings call, Nike Chief Financial Officer Andrew Campion said the company returned to growth in North America faster than it anticipated.
Overall, Nike posted earnings of $1.09 billion, or 67 cents a share for the three-month period ended Aug. 31, as compared to $950 million, or 57 cents a share in the comparable period last year. Analysts on average were looking for earnings of 63 cents a share.
Revenue for the quarter came in at $9.95 billion, up 9.7 percent from the same period last year, and above consensus forecast of $9.94 billion.
Looking forward, the company expects sales and gross margin similar to the latest quarter.
The athletic shoe maker launched its ad campaign featuring ex-NFL quarterback Colin Kaepernick during the second quarter. Experts believe that 61 percent more merchandise was sold during the period as a result of that campaign.
Nike expects its costs to rise in the second quarter amid higher spending on advertisement during the NFL and NBA seasons, beside higher investment in its digital platform.
The company also maintained its outlook for FY 2019.
