POSTED: Thursday, June 28, 2012 - 8:26pm
UPDATED: Thursday, June 28, 2012 - 8:29pm
Nike shares plunged 10% in after-hours trading Thursday following a quarterly earnings report that missed analyst estimates.
The sportswear giant's quarterly revenue rose 12% versus last year to $6.5 billion, but net income fell 8% on declining margin and increased expenses.
In particular, Nike cited factors including rising materials costs, a higher effective tax rate and increased marketing expenses surrounding events like the Summer Olympics and soccer's European Championship.
The company also took a $24 million charge related to its restructuring in Western Europe, and incurred a stiff customs fee in an unnamed emerging market country based on its imports in previous years.
Nike's earnings per share were $1.17; analysts surveyed by Thomson Reuters had expected them to hit $1.37.
Nike announced plans last month to divest its Cole Haan and Umbro businesses. Those two units lost a combined $43 million during Nike's 2012 fiscal year, which concluded at the end of May.
Other sportswear producers and retailers also slumped after-hours on the news. Under Armor dropped 3.9%, Dick's Sporting Goods slipped 2.4%, and Foot Locker fell 4.8%.