Nike gives cautious North American outlook; profits jump

NEW YORK: Nike reported solidly higher third-quarter earnings Tuesday, but warned a tough North American selling environment

The sports apparel and sneaker for the quarter ending February 28, up 20 percent from the yearago period.

Revenues came in at $8.43 bil earlier period, but a bit below the $8.47 billion expected by analysts.

Gross margins contracted by 140 basis, due in part to greater discounting of merchandise.

During a conference call with analysts, Nike chief financial officer Andrew Campion described the North American retail market as “not in a steady state” as the rise of e- commerce continues to disrupt the market, leading to a glut of merchandise that depresses prices.

“We’re going to be remain tight with respect to supply that we are putting into the North American market in the short-term,” Campion said.

Campion described business conditions as more favorable in other markets, including China, where the sports giant is investing heavily.

The number of marathons in China has increased by 500 authorities have forecast a sports market valued at $850 billion by 2025.

Nike shares tumbled 3.5 percent in after- hours trade to $ 55.99. The results were released after the market closed Tuesday.