Nike sold more sneakers and gear during the fiscal fourth quarter than Wall Street expected, helping to boost revenue by 4% to just over $10 billion.
Its earnings released Thursday, however, missed analysts’ expectations by a few pennies a share and the stock initially fell by more than 4% in after-hours trading before rebounding. They were trading down 1% by 4:30 p.m. ET.
It earned 62 cents a share on an adjusted basis during the three months ended May 31, short of Wall Street’s forecast for 66 cents a share, according to average analysts’ estimates compiled by Refinitiv.
Revenues for the Nike brand, which excludes Converse sneakers, jumped 10% from the same quarter last year to $9.7 billion. Converse sales were about flat at $491 million.
Total sales in North America, excluding fluctuations in currency rates, were up 8%. Sales in the China region surged 22%.
The company said its profit margins were hurt this quarter partially because of investments to sell more directly to consumers and less through wholesalers. Nike has had to sell more of its products directly to customers as retailers like Sports Authority have filed for bankruptcy. And this is also something that gives it a leg up over Adidas and Under Armour.
CEO Mark Parker said in a statement announcing the results Nike has built “deeper relationships” with shoppers around the globe during the quarter.
Nike shares had closed Thursday up a little more than 1%. The stock is up about 17% over the past 12 months, bringing the retailer’s market cap to roughly $131.2 billion. It’s also significantly outperformed the S&P 500 Retail ETF (XRT), which is down 14% from a year ago.