Nike falls as co. tamps down 2014 profit outlook

Nike falls as company tamps down 2014 earnings forecast

Associated Press
Nike falls as co. tamps down 2014 profit outlook
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Nike Shox running shoes are seen Friday, June 21, 2013, in Tampa, Fla. Nike Inc. reports quarterly financial results after the market closes Thursday, June 27, 2013. (AP Photo/Chris O'Meara)

NEW YORK (AP) -- Shares of Nike fell on Friday as the athletic shoe and clothing company slightly lowered its 2014 earnings forecast and gave a lackluster first-quarter outlook.

Late Thursday Nike reported fourth-quarter results that topped Wall Street's expectations. The Beaverton, Ore., company earned 76 cents per share on revenue of $6.7 billion. Analysts polled by FactSet predicted earnings of 74 cents per share on revenue of $6.63 billion.

For 2014, Nike expects a low double-digit increase in earnings per share. It previously predicted a mid-teen rise in the figure. Revenue is expected to be near the upper end of its high single-digit target range. Nike's previous guidance was for full-year revenue growth at or slightly above its high-single-digit projected range.

During a conference call, Nike said that it foresees first-quarter earnings per share to be "well above" the low-double digit increase forecast for the year. Revenue growth is anticipated in the mid to high single digits, while gross margin is expected to be basically flat. In last year's quarter, Nike reported an 18 percent rise in revenue.

Kate McShane of Citi Investment Research said in a client note that Nike's revised 2014 earnings forecast may be conservative, as she believes the retailer may report better first-quarter revenue than it is predicting and could do better in the second half of the year as well. The analyst maintained a "Buy" rating and lifted Nike's price target to $72 from $68.

Janney Capital Markets' Eric Tracy said that Nike's outlook appears achievable. The analyst expects the company could report 2014 revenue growth in the high single-digits to low double-digits, given its ability to take market share in developed markets and its ongoing efforts in emerging markets.

The analyst kept a "Neutral" rating and $57 price target.

Nike Inc. declined to comment. Its stock shed 62 cents to $61.70 in midday trading.

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