Nike Revenue and Profit Climb
March 22 2016 - 5:16PM
Dow Jones News
By Tess Stynes
Nike Inc. said its revenue rose 7.7% and profit climbed in the
latest quarter, helped by what the company said was robust growth
across its business lines.
Still, shares fell 2.7% to $63.15 in recent after-hours trading
as revenue was still shy of expectations.
The Beaverton, Ore., company said revenue increased to $8.03
billion for the three-month period ended Feb. 29, from $7.46
billion a year earlier. Analysts polled by Thomson Reuters expected
revenue of $8.2 billion. Excluding currency fluctuations, revenue
grew 14%.
The world's largest sportswear maker by revenue reported
continued strength in North America and China. Revenue in North
America grew 13%, while sales in its Greater China segment improved
by 23%.
Nike's quarterly earnings report comes as most of the retail
sportswear industry is facing a crunch, with the bankruptcy filing
of Sports Authority Inc. shaking up the near-term forecast at
Dick's Sporting Goods.
The athletic gear company said futures orders, which reflect
products scheduled for delivery from March through July, rose 12%
on a global basis, compared with an increase of 2% a year earlier
and the 15% growth from the last quarter. Futures orders are
closely watched by investors as a benchmark for demand for Nike
products.
Excluding currency impacts, futures orders increased 17%,
compared with a rise of 11% a year earlier and the 20% growth in
the previous quarter.
Over all, Nike reported a profit of $950 million, or 55 cents a
share, up from $791 million, or 45 cents a share, a year earlier.
Analysts expected a per-share profit of 48 cents.
Gross margin was flat at 45.9% as higher average selling prices
and growth in the higher-margin direct-to-consumer business were
offset by negative currency impacts, higher warehousing costs and
efforts to clear inventories in North America.
Nike has used expensive sponsorships to increase its market
share in sports such as soccer and basketball. In the latest
period, Nike increased such spending--called demand creation--by
10% to $804 million.
At quarter's end, inventories were $4.6 billion, up 8% from a
year earlier.
Nike last week unveiled coming products, including its
HyperAdapt Trainer 1.0 sneakers with self-lacing technology that
the sportswear company plans to plans to sell later this year.
Investors likely will be listening on the conference call for any
details on the pricing of the shoe, which will be available for the
2016 holiday season, as well as any indication when the new
products will affect Nike's bottom line.
Last fall Nike, the world's largest sportswear maker by sales,
outlined plans to achieve $50 billion in revenue by 2020, more than
one-third of which it hopes to generate from direct sales to
consumers, up from about a fifth in 2015. Investors also likely
will be listening for any comments on Nike's wholesale or
direct-sales strategy.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
March 22, 2016 17:01 ET (21:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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