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Nike profit beats on strong demand
Nike (NKE) topped Wall Street's earnings estimates on Thursday, but sales figures came in below expectations as it struggled with the negative impacts of a stronger dollar.
The sports apparel retailer reported fiscal third-quarter earnings of 89 cents per share on revenue of $7.46 billion, versus projections for 84 cents per share on $7.62 billion in sales, according to a consensus estimate from Thomson Reuters.
During the company's earnings call Nike said it expects fiscal 2016 revenue to fall in the high single-digit range, below its previous expectations of above the mid-teens. It sees full-year earnings coming in below its long-term targets.
The stock rose about 4 percent in after-hours trading.
"Our strong third-quarter results show that our growth strategies are working, even under challenging macroeconomic conditions," Nike President and CEO Mark Parker said in a statement.
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The Beaverton, Oregon-based company had reported earnings of 75 cents a share on $6.97 billion in revenue during the year-earlier period.
For the quarter ended Feb. 28, 2015, revenue increased 7 percent year over year, with sales at its Nike and Converse brands rising 11 percent and 33 percent, respectively, on a currency neutral basis. Net income climbed 16 percent to $791 million.
The firm also said orders for Nike brand shoes and clothing scheduled for delivery from March through July 2015, or worldwide ``futures orders,'' increased 11 percent, excluding the impact of currency changes. Analysts had expected global futures orders to rise 9.9 percent, according to Consensus Metrix.
The sportswear maker's gross margin increased significantly to nearly 46 percent thanks to a "continued shift in mix to higher-margin products, partially offset by higher product input and warehousing costs," Nike said.
The company generated more than half of its revenue outside North America in the previous quarter. A strengthening dollar relative to key global currencies poses a challenge for Nike, Parker said in its December earnings call.
The dollar has jumped nearly 10 percent against a basket of leading currencies so far this year.
Nike shares have surged 24 percent in the last year.
-CNBC's Jacob Pramuk contributed to this article
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