Nike: These Earnings Don’t Impress Investors
Despite higher sales of its clothing and footware brands, Nike (NYSE:NKE) said Thursday its fiscal first-quarter net income fell 12 percent due to higher materials and labor costs. Results did beat analysts expectations, but nevertheless, shares fell nearly 4 percent in after-hours trading.
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While analysts had expected the company to report revenue of $6.43 billion for the quarter ended August 31, revenue was up 10 percent to $6.7 billion from the year-earlier quarter. However, in contrast, net income for the three month period fell to $567 million, or $1.23 per share.
In an accompanying press release the company said, “Strong demand for NIKE, Inc. brands propelled first quarter revenue to new record highs. As expected, diluted earnings per share were lower due to lower gross margin, higher SG&A and an increase in the tax rate.”