Nike misses quarterly profit estimates on higher marketing expenses
INTERNATIONAL - Nike Inc missed analysts’ estimates for quarterly profit on Thursday, as the world’s largest sportswear maker spent more on marketing and new product launches.
To generate more demand Nike has collaborated with more celebrities, sped up product development in its popular Jordan sneaker brand and ramped up marketing around major sporting events.
However, the initiatives have not come cheap with the company’s costs rising 10 percent to $12.7 billion in the past 12 months.
Nike’s net income fell to $989 million, or 62 cents per share, in the fourth quarter ended May 31, from $1.14 billion, or 69 cents per share, a year earlier.
Analysts on average had expected earnings of 66 cents per share, according to the IBES data from Refinitiv.
Revenue rose 4 percent to $10.18 billion, beating analysts’ average estimate of $10.16 billion.
Nike’s shares fell about 1 percent to $83.09 in extended trading.