Nike Inc. missed analysts’ estimates for quarterly profit as the world’s largest sportswear maker spent more on marketing and new product launches, Reuters reports.
To generate more demand Nike has collaborated with more celebrities, sped up product development in its popular Jordan sneaker brand and ramped up marketing around major sporting events.
However, the initiatives have not come cheap with the company’s costs rising 10 percent to US$12.7 billion in the reported quarter.
Nike’s net income fell to US$989 million, or 62 US cents per share, in the fourth quarter ended May 31, from US$1.14 billion, or 69 US cents per share, a year earlier.
Analysts on average had expected earnings of 66 US cents per share, according to IBES data from Refinitiv.
Revenue rose 4 percent to US$10.18 billion, beating analysts’ average estimate of US$10.16 billion.
Nike’s shares fell about 1 percent to US$83.09 in extended trading on Thursday.
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