Nike Misses Profit Estimates

Nike's(NKE) fourth-quarter earnings fell 5% from a year ago due to an arbitration-related charge. Excluding that item, earnings rose 4% from a year ago but missed Wall Street estimates.

Nike earned $332.8 million, or $1.27 a share, in the quarter, compared with $349.5 million, or $1.30 a share, a year ago. A ruling in arbitration with Converse reduced earnings in the latest quarter by 12 cents a share. Before that, Nike's profit of $1.39 a share was a penny light.

In the fourth quarter, gross margins were 43.8%, compared with 45.2% last year. Selling and administrative expenses were 30.8% of fourth-quarter revenue, compared to 30.6% last year.

Fourth-quarter sales rose 8% from a year ago to $4.01 billion, topping the consensus estimate of $3.98 billion compiled by Thomson First Call.

Nike didn't provide earnings guidance in its fourth-quarter release, but did say future orders totaled $6.6 billion, up 5% from a year ago. The outlook was about 20 basis points south of the Street consensus.

Nike closed at $83.63 Tuesday, down 62 cents, or 0.7%. In after-hours trading, the shares fell $1.79 to $81.88.

"The Nike brand has never been stronger," the company said. "We deepened our brand leadership in core categories such as basketball and soccer, and experienced strong growth in key markets such as the United States, Latin America, China and Russia. Our broader brand portfolio also performed well, with stellar performances for the year from Brand Jordan, Nike Golf and Converse.

"As we drive top-line results and extend our brand leadership. We also remain committed to creating value for shareholders. Our management focus on operating expense leverage is playing an increasingly important role in delivering our long-term financial goals and we continue to deliver strong cash returns to shareholders through increased share repurchases and a rising dividend payout ratio," Nike said.

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