Nike Inc. , as a global leader in sports equipment and apparel , came out with its
third-quarter 2012 results. The company’s earnings came in at $1.20 per share, up 11.1% from the year-ago earnings of $1.08 per share, surpassing the Zacks Consensus Estimate of $1.16 per share. In the quarter, robust demand scenario for Nike brands coupled with selling and administrative expense leverage and lower share count boosted its bottom line.
Nike’s total revenue grew 15.1% to $5,846 million from $5,079 million in the prior-year quarter, primarily driven by growth in all key categories of NIKE Brand, and in geographic regions excluding Japan. Revenue for the quarter surpassed the Zacks Consensus Estimate of $5,829 million. During the quarter, all brands including Converse, Hurley, NIKE Golf and Umbro, reflected growth from last year, while Haan remained flat.
Nike’s quarterly gross profit surged 10% from the year-ago quarter to $2,561 million, while gross margin contracted 200 basis points to 43.8%. The margin contraction mainly resulted from higher product costs, offset by favorable profitability from Direct to Consumer operations, positive pricing actions impact and benefits from cost reduction initiatives.
Selling and administrative expenses for the quarter grew 10% to $1,802 million from $1,637 million in the year-ago quarter. Earnings before taxes (EBT) rose 9% to $770 million from $707 million in the year-ago period. However, EBT margin contracted 70 basis points from the prior-year quarter to 13.2%.
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