Nike Inc. suffered a sizable stumble Thursday as fourth-quarter earnings not only missed analysts’ expectations but fell 7.6 percent under pressure from higher-product and marketing costs.
Despite a 12.2 percent increase in overall revenues and growth in all regions, profitability was off for the Nike brand in Western Europe and corporate gross margin fell 150 basis points, to 42.8 percent of sales. Investments in digital operations and “demand creation” collided with higher product input costs, a higher tax rate and what was termed “an unanticipated customs assessment” in its emerging markets segment to produce the shortfall.
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