Nike Inc. (NKN.N) did something highly out of character on Thursday: It missed earnings estimates.

The athletic brand posted profit of 62 cents U.S. a share, short of the 66-cent average projection. That hasn’t happened since the middle of 2012, seven years ago.

The company blamed higher overhead expenses, along with a steeper tax bill, for weighing on earnings. Its effective tax rate was 20.4 per cent -- compared with just 6.4 per cent in the year-earlier period, partly due to the tax overhaul passed in 2017.

After the jolt of Nike missing earnings, investors sent the shares down as much as 4.9 per cent to US$79.56 in extended trading, though they soon took it in stride. As of 5 p.m. in New York, the stock had rebounded and was little changed from the close.

Nike’s revenue met projections, reassuring investors that its efforts to find new growth opportunities remain on track. Sales rose 4 per cent in the fiscal fourth quarter to US$10.2 billion, a record for the world’s largest athletic brand. When holding currency neutral, the increase was 10 per cent.

Nike’s growth stalled in 2017, but it’s gotten back on track in the past two years. Still, the increases have been slowing.

Nike remains in a better position than most in the athletic-gear industry amid trade tensionsbetween the U.S. and China. Only about 26 per cent of Nike’s footwear and apparel were made in China last year. And according to Susquehanna Financial Group, less than 10 per cent of that is imported to the U.S.

So far, Nike hasn’t been impacted by the trade spat, executives said on a call with investors. In fact, the company continues to source products from China, and sees an opportunity to expand production there, they said.

The company plans to launch its app in China, as well as unveil women’s apparel for the Asian market, in the coming months. Some of the innovations developed for China could eventually make their way into other markets.

China Business

“China is putting us in a better position to be a better global company,” Chief Executive Officer Mark Parker said on the call.

In December, Parker said 2019 would be a “true tipping point” for women in sports. Nike outfitted 14 of the 24 teams in the ongoing women’s World Cup and expects to see large gains in the category.

The stock was up 13 per cent this year through Thursday’s close.