Nike Inc, the world’s largest footwear maker, reported quarterly revenue and profit that topped market estimates as the company kept a lid on costs and saw greater demand in Western Europe, China and emerging markets.
Shares of the Dow component were up nearly 3 percent recently at $54.67 in after-market trading.
In the face of intense competition in North America and to promote its core brands such as ZoomX, Air VaporMax and Nike React, the company earlier in June said it would cut 2 percent of its global workforce and trim a quarter of its shoe styles as it looks to become nimbler.
“Our consistent growth is fueled by innovation, which is why fiscal 2016 was such a breakthrough year for Nike in everything we do,” said Mark Parker, Nike President and CEO. “From product to manufacturing to how we serve our consumers – more personally and at scale – we’ve raised the bar of what’s possible. It’s a great time to be in sports, and the Nike Brand has never been stronger. Fueled by our unrivaled roster of athletes, fiscal 2017’s calendar of sport moments promises to build on our business momentum and inspire consumers.”
Highlights from Q4 and Annual Report included:
- The company’s selling, general and administrative expenses fell 4 percent to $2.7 billion.
- Sales in Western Europe, Nike’s second-largest market, were up 4 percent in the fourth quarter ended May 31.
- Greater demand for its core brands including Jordan, and in sportswear and running categories in the quarter.
- Sales in Greater China jumped 11 percent. In China, the company has revamped stores and increased online efforts in a bid to reinvigorate demand in the world’s No. 2 economy.
- Net income rose to $1 billion, or 60 cents per share, in the quarter, from $846 million, or 49 cents per share, a year earlier. Revenue rose 5.3 percent to $8.68 billion.
- Analysts on average had expected revenue of $8.63 billion, according to Thomson Reuters I/B/E/S.
- Excluding certain items Nike earned 60 cents per share, well ahead of analysts’ average estimate of 50 cents.