Nike Sales Surge, Boosted by China -- 3rd Update
September 24 2015 - 7:49PM
Dow Jones News
By Sara Germano And Tess Stynes
Nike Inc. posted a 23% jump in quarterly profits and
particularly strong sales gains in China, as the world's largest
sportswear maker bucked concerns about that country's economic
health.
The athletic gear company reported a three-month profit of $1.18
billion as sales rose 5% from a year earlier to $8.41 billion.
Excluding the effects of currency fluctuations, Nike said its
global sales rose 14% in the quarter ended Aug. 31. Leading all
regions in revenue growth was China, where sales jumped 30% to $886
million.
China had been a trouble spot for Nike just two years ago, as
the company wrestled with lagging sales and depleted demand after a
massive run-up to the 2008 Olympics. The company has worked with
wholesale partners in the region to remodel how products are
displayed to customers.
"While we are very mindful of the macroeconomic volatility in
China, our brand has never been stronger and our marketplace has
never been more healthy," said Andrew Campion in his first earnings
call as Nike's chief financial officer. Mr. Campion succeeded Don
Blair, who retired this summer.
Nike said futures orders, which reflect products scheduled for
delivery in the next six months, rose 9% on global basis. Futures
orders are closely watched by investors as a benchmark for demand
for Nike products.
Shares of the Beaverton, Ore.-based company rose 7.8% to $123.90
in recent after-hours trading as the company's per-share earnings
and revenue surpassed expectations. Through Thursday's close, the
stock had risen 42% over the past 12 months.
Nike has been benefiting from cultural trends that favor its
products, including the rise of athletically styled footwear and
clothes among consumers who aren't necessarily planning a
workout.
The world's top sneaker seller also holds the 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 reported a 10% rise in inventories in North America, which
it attributed in part to buildup from the West Coast port closures
earlier this year. Executives said that they expect the clearance
of excess inventory to resolve in the next two quarters, which
could impact margin growth during the period.
Write to Sara Germano at sara.germano@wsj.com and Tess Stynes at
tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 24, 2015 19:34 ET (23:34 GMT)
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