BEAVERTON, Oregon _ Nike Inc. posted record sales of $15 billion (euro11.94 billion) for its fiscal year despite a drop in fourth-quarter earnings it blamed on a Converse arbitration ruling and World Cup soccer spending.

Revenue grew 9 percent from $13.7 billion the previous year, while profit jumped 15 percent to $1.4 billion (euro1.11 billion) in fiscal 2006 from $1.2 billion in 2005. Earnings per share grew 18 percent to $5.28 from $4.48 a year ago.

"Fiscal 2006 was indeed one for the record books," said Don Blair, Nike chief financial officer.

The final quarter saw some slippage, however, as the athletic shoe and clothing giant saw earnings drop 5 percent to $332.8 million (euro264.82 million), or $1.27 per share, from $349.5 million, or $1.30 per share, last year.

Excluding a 12-cent charge per share for a $52.5 million (euro41.78 million) settlement between its Converse subsidiary and a former licensee, Nike earnings would have been $1.39 per share _ a penny off the estimate of $1.40 by analysts surveyed by Thomson Financial.

Blair said the quarter also reflected heavy spending for World Cup soccer marketing, a cost that will ease moving into 2007.

Nike is in a battle for soccer supremacy with Adidas AG, the official sponsor of the World Cup, and the No. 2 sporting goods company in the world after Nike.

Fourth-quarter sales increased 8 percent to $4.01 billion (euro3.19 billion) from $3.72 billion in the same period last year.

Analysts were concerned about a larger-than-expected decline in gross margin, a measure of efficiency calculated as a percentage of remaining revenue after subtracting the cost of goods sold.

"The Converse settlement and World Cup spending wasn't the whole story," said Sara Hasan of McAdams Right Ragen in Seattle.

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