(Adds executive and analyst comments, details, outlook; updates
By Devika Krishna Kumar
June 26 Nike Inc reported
better-than-expected quarterly results, as demand for its
apparel and footwear rose in North America and Western Europe
after the company spent heavily on marketing ahead of the 2014
soccer World Cup.
Shares of the world's largest sports wear maker rose 3.2
percent to $79.37 in extended trading.
Nike, known for its distinctive 'swoosh' or tick logo, gets
more than half of its total revenue from North America and
Revenue from North America rose 10 percent in the fourth
quarter ended May 31, while revenue from Western Europe jumped
18 percent, excluding the impact of currency fluctuations.
"Nike is the number one brand in each of the top 10 cities
in Western Europe," Nike Brand President Trevor Edwards said on
a post-earnings conference call.
The company has been giving tough competition to Germany's
Adidas AG on the hotly-contested European turf.
Nike has been "putting a lot of trend-right products into
the marketplace, so there's very high demand," Edward Jones
analyst Brian Yarbrough said.
Nike maintained its share of the Western Europe sportswear
market at about 12 percent in 2013, while Adidas's share shrank
to 12.6 percent in the year from 13.2 percent in 2012, according
to Euromonitor International data.
The soccer World Cup, hosted by Brazil, marks the first time
that Nike is sponsoring more national teams than Adidas.
Nike signed up soccer legends Cristiano Ronaldo, Neymar Jr.,
Eden Hazard and Wayne Rooney for commercials to promote its
merchandise ahead of the much-watched event. Its "Winner Stays"
commercial attracted over 82 million views on YouTube.com.
The company said its marketing expenses rose 36 percent in
the fourth quarter, mainly due to expenditure related to the
Nike's marketing expenses are expected to increase by 30
percent in the current quarter as it looks to grab the attention
of soccer fans, a company executive said.
Nike launched shoes branded Mercurial Superfly, Magista
Obra, the Nike Hypervenom 2014 World Cup Boot and the Nike
Tiempo Legend V World Cup Boot between March and May.
Ronaldo, declared the world's best footballer after he won
the coveted Ballon d'Or, is wearing the Nike Mercurial Superfly
in the World Cup.
"There are more players wearing Nike boots in the World Cup
than all other brands combined," Nike's Edwards said.
Nike said it expected "tremendous energy" around the World
Cup to help its first-quarter revenue grow in low double digits
in percentage terms, including the impact of currency
Orders for Nike-branded shoes and clothing scheduled for
delivery between June and November, a gauge of demand the
company calls "futures orders," rose 12 percent globally in the
fourth quarter, excluding the impact of currency fluctuations.
The rise in orders was driven by Western Europe, where
futures orders jumped 25 percent.
Nike's net income from continuing operations rose to $698
million, or 78 cents per share, in the quarter from $690
million, or 76 cents per share, a year earlier.
Revenue from continuing operations rose 13 percent to $7.43
billion, excluding currency fluctuations.
Analysts on average had expected a profit of 75 cents per
share and revenue of $7.34 billion, according to Thomson Reuters
(Editing by Kirti Pandey)