Shares of shoemaker Nike are down over 7% after hours after a big whiff on earnings.The company reported EPS of $1.17 vs. estimates of $1.37, according to Bloomberg.
The company cited lower margins and global economic weakness that’s expected to continue into next year.
Here’s the key text of the press release
NIKE, Inc. (NKE) today reported financial results for its fiscal 2012 fourth quarter and full year ended May 31, 2012. Fourth quarter revenues rose 12 per cent, or 14 per cent on a currency neutral basis, to $6.5 billion, the largest revenue quarter in NIKE, Inc.’s history. This was a result of higher revenues across every NIKE Brand geography, key category and product type as well as across all Other Businesses. However, diluted EPS for the quarter was down 6 per cent as a result of a lower gross margin, higher SG&A spending, an increase in the effective tax rate and a charge related to restructuring NIKE Brand Western Europe’s operations to better realign resources against growth opportunities and drive efficiencies.
Revenues for fiscal 2012 were up 16 per cent, or 14 per cent excluding the impact of changes in foreign currency, to $24.1 billion. Diluted EPS for the year increased 8 per cent to $4.73 as a result of strong revenue growth, leverage of SG&A, and a lower average share count, which more than offset the impact of a lower gross margin and higher effective tax rate.
“Fiscal year 2012 demonstrated NIKE, Inc.’s greatest strength – innovation. We delivered an amazing number of game-changing products and services that drove record revenue growth,” said Mark Parker, President and CEO, NIKE, Inc. “We also delivered solid profit growth for the year despite some headwinds in a challenging global economy, which will continue into the next year. That said, NIKE is well positioned and will remain aggressive, flexible and laser-focused on the high-growth opportunities. That’s how we continue to deliver long-term profitable growth for our shareholders.”*