Posted at: 09/26/2013 5:36 PM
Nike 1st quarter net income jumps
(AP) BEAVERTON, Ore. - Strong demand for Nike’s shoes and apparel in North America and Europe, as well as price increases in regions around the world, helped the athletic goods maker’s net income rise 38 percent in the fiscal first quarter.
Results beat expectations and the company’s shares rose 6 percent in aftermarket trading.
Nike has been dealing with Europe’s fluctuating economy and a slowdown in growth in China. The company has been working to reduce its inventory in China and reworking its offerings there to adapt to the changing tastes of Chinese consumers. In a call with analysts, the company said it expects China revenue to grow in the second quarter and be roughly flat for the year as it works to turnaround results.
"We continue to make progress on repositioning this market for long-term sustainable growth," said CEO Mark Parker.
Meanwhile, Nike has been enjoying strong demand in its largest market, North America, where it has been selling off less profitable brands like Umbro to focus on core brands like Nike and Converse. All categories except golf grew in North America during the quarter.
Nike Inc. said Thursday its net income for the three months that ended on Aug. 31 rose to $780 million, or 86 cents per share. That compares with net income of $567 million, or 63 cents per share a year ago. That beat analyst expectations of 78 cents per share, according to research firm FactSet.
Net income was helped by easing costs for raw materials and selling fewer items at a discount, partly offset by higher labor costs and the stronger dollar.
The company, based in Beaverton, Ore., says revenue rose 8 percent to $6.97 billion. Analysts expected revenue of $6.96 billion. Nike brand revenue rose 7 percent to $6.5 billion and was higher in running, basketball, soccer and men’s training. That offset a slight decline in sportswear. Converse revenue rose 16 percent to $494 million.
Revenue rose in all regions except China, where revenue fell 3 percent to $574 million.
Europe was a bright spot. Revenue in Western Europe rose 8 percent to $1.3 billion, and revenue in Central and Eastern Europe rose 10 percent to $366 million. North America revenue rose 9 percent to $3.14 billion.
Orders for goods scheduled to be delivered between September and January 2014 rose 8 percent.
Shares rose $4.27 to $74.61 in aftermarket trading, after closing the regular trading day up $1.42, or 2 percent, at $70.34. The stock has traded between $44.83 and $70.56 over the past year.
(Copyright 2013 by The Associated Press. All Rights Reserved.)