The sports apparel giant had sales expectations fall a bit short as it tempers future projections.
BY JACOB PALMER | DIGITAL NEWS EDITOR
Nike reported its third-quarter earnings and profit numbers Thursday, surpassing Wall Street’s earnings expectations for the 11th-straight time.
The sports apparel company had $791 million in profits, a 16% increase from the third-quarter of 2013, Portland Business Journal reports.
Sales climbed 7 percent to $7.5 billion. The company continues to benefit from strong consumer loyalty and growth of the athletic apparel industry. It remains the dominant global sportswear company. The strong dollar ate into the company’s top line. Sales came up short of the $7.62 billion expected by analysts.
“Our strong third quarter results show that our growth strategies are working, even under challenging macroeconomic conditions,” said CEO Mark Parker, in a news release. “Nike has the ability to deliver consistent shareholder value due to the strength of our brand, our relentless commitment to innovation and our powerful portfolio that allows us to invest in the opportunities with the highest potential for growth as well as manage risk.”
Nike reported that it is expecting “headwinds” to intensify from volatile foreign currencies, OregonLive.com states.
Nike, like any U.S. company that sells much of its products in overseas, is more susceptible to currency swings. One way to lessen the impact is to increase prices on products sold outside the U.S., but Blair indicated that would not happen.
In China, however, sales of $801 million represented a 15 percent increase over the same quarter a year ago and were up even more – 17 percent – after currency changes as the country’s currency remain strong relative to the dollar. Most significantly, said Nike Brand president Trevor Edwards, the quarter showed that Nike’s two years of reconfiguring its approach to the strategically important region was paying off.
A labor strike at a Chinese shoe factory is another minor headache for Nike and its competitor Adidas, Bloomberg News reports.
The strike started Tuesday when the company undertook “personnel adjustments” and re-organizations to “enhance capabilities,” Liu said, without disclosing further details. Yue Yuen is working with labor unions and government officials to resolve the issue, he said, declining to comment when asked if there would be job cuts.
Yue Yuen’s work stoppage follows a labor disruption at fellow shoemaker Stella International Holdings also in Dongguan city last week. Chinese workers, previously viewed by manufacturers as an inexpensive and mostly compliant labor force, have gained increasing awareness of their rights and bargaining power in recent years.
At home, Under Armour continues to establish itself as a legitimate competitor for the No. 2 spot currently held by Adidas.
This year marks an all-time high in number of teams in the NCAA Tournament outfitted by Under Armour, Bloomberg News reports.
Under Armour Inc., which has a best-in-company-history six schools wearing its shoes and jerseys in the National Collegiate Athletic Association tournament, definitely cares. Founded as a sports-apparel maker and forging a path in a sneaker industry dominated by Nike Inc., the company is gaining traction in basketball — one of footwear’s fastest-growing segments — helped by the devotion of consumers known as sneakerheads. Under Armour, which sold its first shoe in 2006, last month debuted its first basketball sneaker tied to a specific player, the National Basketball Association’s top All-Star vote-getter, Stephen Curry.
“It’s really important from an athletic credibility point of view to have the teams that win or do well in college sports,” said Matt Powell, an analyst for researcher NPD Group Inc. “It’s a smart move.”
