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Nike Inc. (NKE) (NKE), the world’s largest sporting-goods company, tumbled the most in four years after fourth-quarter profit unexpectedly declined for the first time since 2009 as marketing costs increased and sales growth slowed.
Nike fell 11 percent to $86.29 at 10 a.m. in New York and earlier slid as much as 12 percent for the largest intraday decline since June 26, 2008. The stock had gained (NKE) 0.5 percent this year through the end of regular trading yesterday.
Net income in the quarter ended May 31 declined 7.6 percent to $549 million, or $1.17 a share, Beaverton, Oregon-based Nike said yesterday in a statement. That’s the first drop since the November 2009 quarter. Analysts projected $1.37 a share, the average of 20 estimates. Profit had topped analysts’expectations in 22 of the past 23 quarters.
Chief Executive Officer Mark Parker responded to higher costs by introducing widespread price increases in January to improve Nike’s gross profit margin, which narrowed for the sixth straight quarter. The company’s sales also slowed in Europe, where it generates about a quarter of its revenue, as recession and government cuts curbed consumer spending.
“We would not be buyers of the stock
Nike fell 11 percent to $86.29 at 10 a.m. in New York and earlier slid as much as 12 percent for the largest intraday decline since June 26, 2008. The stock had gained (NKE) 0.5 percent this year through the end of regular trading yesterday.
Net income in the quarter ended May 31 declined 7.6 percent to $549 million, or $1.17 a share, Beaverton, Oregon-based Nike said yesterday in a statement. That’s the first drop since the November 2009 quarter. Analysts projected $1.37 a share, the average of 20 estimates. Profit had topped analysts’expectations in 22 of the past 23 quarters.
Chief Executive Officer Mark Parker responded to higher costs by introducing widespread price increases in January to improve Nike’s gross profit margin, which narrowed for the sixth straight quarter. The company’s sales also slowed in Europe, where it generates about a quarter of its revenue, as recession and government cuts curbed consumer spending.
“We would not be buyers of the stock