BUSINESS

Nike's 3rd-quarter net income rises with higher sales of its popular shoes and sports gear

03/22/2012 05:17 EDT | Updated 05/22/2012 05:12 EDT
BEAVERTON, Ore. - Nike Inc. said Thursday that its price increases combined with higher demand for its products to compensate for higher costs and helped its third-quarter profit rise 7 per cent.

The world's largest maker of athletic shoes and clothing said its orders heading into spring were up 15 per cent from a year ago, signalling continued strong demand for its goods.

The results beat analysts' expectations. But higher costs for materials, labour and freight ate into Nike's gross margin, or the amount of each dollar in revenue a company actually keeps.

Net income for the quarter that ended Feb. 29 rose to $560 million, or $1.20 per share.

That's compared with $523 million, or $1.10 per share, in last year's third fiscal quarter. And it beats the $1.17 per share that analysts polled by FactSet expected on average.

The company, based in Beaverton, Ore., said revenue rose 15 per cent to $5.85 billion, just beating the $5.82 billion analysts expected.

Nike raised a ruckus in February, when it released its outer-space theme Foamposite Galaxy sneakers. Crowds of people waiting in line for a chance to hand over $220 for the glow-in-the-dark dissolved into conflicts. Similar scenes occurred in December when Nike released its retro Air Jordan XI basketball shoes.

Products Nike released this month include FlyKnit lightweight shoes — intended to feel like socks — and apps related to the summer Olympics that aim to help people crosstrain and play basketball.

Nike shares edged up $1.06 to $112.05 after hours. Before the company reported its earnings, they ended regular trading at $110.99, up 55 cents.