Nike Sales Surge, Boosted by China, Higher Prices -- Update
September 24 2015 - 5:05PM
Dow Jones News
By Tess Stynes
Nike Inc.'s sales rose a better-than-expected 5%, boosted in
part by higher average selling prices and strength in its China
business.
Shares of the Beaverton, Ore.-based company rose 7.1% to $122.92
in recent after-hours trading as per-share earnings and revenue
surpassed expectations. Through the close Thursday, the stock had
risen 42% over the past 12 months.
The world's top seller of sports and footwear has had a giant
lead in the sports apparel sector, where in addition to competition
from Germany-based rival Adidas AG, younger rivals such as Under
Armour Inc. and Skechers USA Inc. have been moving in on its
turf.
Nike has benefited from cultural trends that favor its products,
including the rise of athletically styled footwear and clothes
among consumers that aren't necessarily planning a workout.
World-wide orders of Nike apparel and footwear for delivery from
September 2015 through January 2016 improved 9% from a year
earlier, including currency changes. That was below the 11%
increase Nike reported for the year-earlier period but higher than
the 2% growth from the last quarter.
Excluding currency fluctuations, future orders rose 17% from the
year-earlier period. That marked an improvement from 13% growth in
the last quarter.
The future orders don't necessarily reflect actual revenue
growth, but the metric is closely followed by analysts looking for
insight into global demand for Nike's products.
For the three months ended Aug. 31, revenue increased to $8.41
billion from $7.98 billion. Analysts polled by Thomson Reuters had
projected revenue growth of 3% to $8.22 billion.
During the quarter, sales to China rose 30% to $886 million.
Nike reported a profit of $1.18 billion, or $1.34 a share, up
from $962 million, or $1.09 a share, a year earlier. Analysts
polled by Thomson Reuters had expected per-share profit of
$1.19.
Gross margin rose to 47.5% from 46.6%. The company credited the
increase to higher average selling prices and continued growth in
the more profitable direct-to-consumer business.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 24, 2015 16:50 ET (20:50 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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