BEAVERTON, Ore. – Nike said strong global demand for its athletic goods helped third-quarter net income beat Wall Street expectations as it readies for the World Cup in June.
The soccer tournament, held in Brazil this year, has revved up shoppers’ appetite for Nike’s clothing and gear. The company has introduced new products, including a soccer shoe and 10 national team uniforms. Orders set to be delivered between March and July rose 12 per cent to $10.9 billion. That includes a 33 per cent jump in Western Europe, where the World Cup is popular.
Still, there were pockets of weakness, and shares slipped 3 per cent in aftermarket trading. Future orders in China, where Nike has been grappling with slowing growth, fell 1 per cent. And the company says it will continue to be hurt by the stronger dollar this quarter. The stronger dollar can affect U.S. companies that sell goods overseas when they translate foreign income back into U.S. currency. Nike is also dealing with higher costs for raw materials like chemicals and leather as well as labour.
Still, the Beaverton, Ore.-based company got a boost from big revenue gains, particularly in Europe. Higher prices helped offset discounts in some regions to clear excess merchandise.
Nike CEO Mark Parker also highlighted 3-D printing capabilities that were used to bring its Vapor Carbon Elite football cleat on the field quickly in time for the Super Bowl in February. Parker said the company plans to keep using 3-D printing technology.
Earnings from continuing operations rose 3 per cent, to $685 million, or 76 cents per share, in the three months that ended on Feb. 28. Analysts expected 72 cents per share, according to FactSet.
The year before, profit came to $662 million, or 73 cents per share. The Cole Haan and Umbro brands, which were sold in February 2013, added another $204 million in profit to last year’s period.
Revenue rose 13 per cent to $6.97 billion, beating analysts’ expectation of $6.81 billion. Revenue rose 12 per cent in North America, its largest market, to $3.07 billion. In Western Europe, revenue rose 22 per cent to $1.29 billion and in China, revenue rose 9 per cent to $697 million.
Shares fell $2.57 to $76.70 in aftermarket trading after closing the day up 12 cents at $79.27.