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Business

Rising Nike profits beat expectations

The world's largest sportwear manufacturer, Nike, has reported higher profits for the eighth consecutive quarter, with earnings increasing by almost a quarter on rising high-end shoe and apparel sales mainly in the US.

Nike's net earnings in its fourth fiscal quarter ending in May rose a staggering 24 percent to $865 million (772 million euros), the US sportswear maker reported Thursday. Revenue grew 4.8 percent to $7.78 billion.

As the company's profit outpaced expectations for an eighth straigth month, President and Chief Executive Mark Parker described the past year overall as "outstanding" in a conference call with investors.

Nike saw growing demand for its basketball shoes, particularly in the US, as well as running shoes, including brands such as Lunar and Free. Its Converse brand also saw rising sales.

In its home market, Nike sales grew 13 percent in the quarter, helping the company offset the effect of the stronger dollar which dampened earnings elsewhere.

Nike also said bigger sales of higher priced merchandise and growth in its direct-to-consumer business boosted gross margins 60 basis points in the fourth quarter.

The same factors were expected to boost margins by 50 basis points in the current quarter, Chief Financial Officer Don Blair said in the conference call.

Orders growth

Looking ahead, Nike raised its sales growth forecast for the current fiscal year, saying it expected them to grow in the low double digit percentage range based on strong advance orders.

From June through November alone, orders for delivery rose 13 percent excluding currency fluctuations at the end of the fourth quarter, the company said.

Analysts polled by Consensus Metrix had exprected future orders to slow to 10.4 percent from 11 percent at the end of the third quarter.

Brian Yarbrough, analyst with US financial services firm Edward Jones said the rise was "extremely impressive across the board."

"It's almost mind-boggling how a company this big can post numbers this impressive year in and year out," he told the news agency Reuters.

During the conference call, CEO Parker pointed to its women and youth ranges as areas for growth. Women were keener to buy their sportswear online, with female products outstripping men's at Nike.

uhe/cjc (Reuters, dpa)

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