Athletic-apparel giant NIKE Inc. (NKE) Thursday reported its first-quarter results, with profit dropping from last year, hurt largely by increase in costs. However, earnings trumped Street estimates, driven by revenue growth of 4%.
Beaverton, Oregon-based Nike's first-quarter profit rose to $1.47 billion or $0.93 per share from $1.87 billion or $1.16 per share last year. On average, 23 analysts polled by Thomson Reuters estimated earnings of $0.92 per share for the quarter. Analysts' estimates typically exclude one-time items.
First-quarter revenues rose 4% to $12.69 billion from $12.25 billion last year. Revenues were above analysts' consensus estimate of $12.27 billion for the quarter.
Nike Brand Digital business revenues increased by 23%, driven by double-digit growth in EMEA, North America and APLA, partially offset by declines in Greater China.
"NIKE's first quarter results set the foundation for another year of strong growth," said Matthew Friend, Executive Vice President and Chief Financial Officer, NIKE, Inc. "Our focus continues to be the consumer, as we take action to navigate near-term dynamics while expanding long-term structural benefits through our Consumer Direct Acceleration strategy."
Gross margins for the quarter decreased 220 basis points to 44.3 percent, primarily driven by elevated freight and logistics costs, lower margins in Nike Direct business driven by higher markdowns, and unfavorable changes in net foreign currency exchange rates.
NKE closed Thursday's trading at $95.33, down $3.37 or 3.41%, on the NYSE. The stock further slipped $3.68 or 3.86% in the after-hours trading.
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