Nike Post Lower Than Expected Q3 USD5.08bn Revenue

By Community | March 21, 2011

The world’s biggest sports apparel and shoemaker Nike Inc. has announced that its net income for the fiscal third quarter rose by five per cent to US$523m from $497m.

Despite this rise, the quarterly figure posted is a lower-than-expected net income as the company continued to struggle with higher cost of materials, labor, and freight.

Based on reports, Nike’s net income rose by five per cent, or $1.08 per share from the same period last year.

Additionally, company revenue also rose by seven per cent to $5.08bn as worldwide market sales surges due to introduction of new product line. However, the figure still failed to beat analysts’ expectations resulting to a drop in company shares in after-hours of trading at the end of last week.

The Oregon-based company warned investors over the rising cost of materials and labor, saying that it would most likely cut into its profit margins in the second semester of its fiscal year.

Despite this warning, many were expecting stronger margins of around $5.15bn in revenue or $1.12 per share.

Nike expects global demand for its product to pick up in the coming months, noting that orders for the upcoming season has already spiked up by 11 per cent. The company also revealed cost-cutting plans, which they said would pay off anytime soon.