The maker of sports shoes and apparel also said sales in China would
be unchanged or even down slightly this quarter, reawakening
concerns it is having trouble finding its bearings in that market
after signs of progress in recent quarters.
Nike shares fell 3 percent to $76.88 in after-hours trading.
Chief Financial Officer Donald Blair told analysts on a call that
the devaluation of developing market currencies against the U.S.
dollar "will be a significant drag on next year's reported revenue,
gross margin and profit growth."
Blair said Nike now expects earnings per share in the fiscal year
beginning in June that will be "somewhat" below the company's
Nike gets about 30 percent of its revenue from emerging markets,
China and Eastern and Central Europe.
Still, the fundamentals of Nike's business were solid, with strong
demand for its merchandise heading into the World Cup soccer
tournament in June and July.
Orders for Nike-branded shoes and clothing scheduled for delivery
between March and July 2014, a gauge of demand Nike calls "futures
orders," rose 14 percent globally, excluding the impact of currency
fluctuations, led by a 30 percent jump in Western Europe.
The company also reported a better than expected profit for the
third quarter ended February 28, helped by a large jump in revenue
in Western Europe, where it competes with Adidas AG <ADSGn.DE>.
Nike has been spending heavily on marketing ahead of the World Cup,
which Brazil will host this summer.
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Total revenue rose 12.7 percent to $6.97 billion for the quarter
ended February 28, above the $6.69 billion analysts were expecting,
according to Thomson Reuters I/B/E/S.
In China, where Nike has grappled with the lingering effects of
excess inventory and intense competition from rivals cutting prices
in recent years, sales rose 7 percent.
"They continue to produce items that resonate with shoppers
globally," said Edward Jones analyst Brian Yarbrough. "They're
gaining share in each of their markets." Still, the poor forecasts
for China were worrisome, Yarbrough said.
Nike earned $685 million, or 76 cents a share, in its fiscal third
quarter ended February 28, compared to $866 million, or 73 cents per
share a year earlier. Excluding discontinued operations, Nike had a
profit of 76 cents per share for the quarter, four cents better than
Wall Street had expected.
(Reporting by Phil Wahba in New York; editing by Chizu Nomiyama and
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