Nike Posts Higher Q3 Net Income, But Misses Expectations
Nike Inc., the biggest sports apparel and shoemaker in the world, announced on Thursday that its net income for the fiscal third quarter rose by five percent to $523 million from $497 million.
Sport apparel manufacturer Nike Inc. on Thursday posted a lower-than-expected net income for its fiscal third quarter as the company continued to struggle with higher cost of materials, labor, and freight.
Based on reports, Nike’s net income rose by five percent to $523 million, or $1.08 per share from $497 million in the same period last year.
Meanwhile, company revenue also rose by seven percent to $5.08 billion as worldwide market sales surges due to introduction of new product line.
However, the figure still failed to beat analysts’ expectations resulting to a drop in company shares in after-hours of trading on Thursday.
It will be recalled that the Oregon-based company warned investors over the rising cost of materials and labor, saying that it would most likely cut into its profit margins in the second semester of its fiscal year.
Many analysts, despite the statement, were expecting stronger margins of $5.15 billion in revenue or $1.12 per share.
Meanwhile, Nike executive expressed confidence that the higher operating coast would not continue next year, citing plans to raise prices of its products that will be launch this spring.
The company also revealed cost-cutting plans, which they said would pay off anytime soon.
Nike expects global demand for its product to pick up in the coming months, noting that orders for the upcoming season has already spiked up by 11 percent.