BEAVERTON, July 1 -- Nike reported a profit in its fiscal fourth quarter that beat Wall Street's expectations by a wide enough margin to move the stock after hours. Most of the beat came from a single line item: $986 million in recovered tariffs that had nothing to do with how many sneakers the company sold.

According to Reuters, Nike posted earnings per share of $0.35 against a consensus estimate of $0.28. Revenue of $11.28 billion came in modestly above the $11.23 billion estimate. Gross margin expanded by 890 basis points to 49.2 percent, a figure that, read without context, looks like a significant operational improvement. In context, roughly 900 basis points of that expansion came from a recovery of duties paid under the Internation...