SBD/June 27, 2014/Finance

Nike Sees Q4 Profit Rise 5% After Boost From Company's Surging Soccer Presence

Nike is outfitting 10 teams, including the U.S., during the FIFA World Cup
Nike on Thursday said that its profit for the Q4 of FY '14, which ended May 31, rose 5% to $698M, as revenue "climbed" 11% to $7.4B, according to Germano & Stynes of the WALL STREET JOURNAL. The company is "ramping up revenue from soccer-related goods amid broader initiatives to raise prices of both footwear and apparel across categories." Results for FY '14 included $2.3B in "wholesale revenue for soccer products, an 18% jump." Nike said that it spent $3B for the year on promotions, including $876M for Q4, "largely driven by the World Cup." Nike also "posted a dramatic increase in orders for its goods from Western Europe, which rose 25%" (WALL STREET JOURNAL, 6/27). The AP noted Nike's results for Q4 "topped expectations." Nike is "outfitting 10 teams, including the U.S. team, during the World Cup." It also "introduced four new soccer shoes ahead of the tournament." Nike Brand President Trevor Edwards said that more athletes "are wearing its shoes at the World Cup than all other brands combined." Meanwhile, the company's revenue "rose in all geographic regions except Japan." The company said that orders for deliveries "scheduled from June through November rose" 11% compared with a year ago. This is a "good sign for the current quarter" (AP, 6/26). In Portland, Allan Brettman writes competing "to be king of the hill in the world of soccer doesn't come cheaply." As such, Nike increased its "demand creation expense" by 36% in its Q4 results, "driven by its World Cup marketing campaign." Nike spent $642M "for the same quarter last year" on demand creation expense. Nike's unaudited figures show the company has "significantly closed the gap" on adidas (Portland OREGONIAN, 6/27). At presstime, shares of Nike were trading at $78.00 per share, up 1.1% from the close of business on Thursday (THE DAILY).
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