US: Nike first-quarter profit down as China slumps
- Q1 net income fell 12% to $567m
- Sales increased 10% to $6.7bn
- Gross margin declined 80 basis points to 43.5%
Sportswear brand Nike recorded a decline in first-quarter net income as profits and orders in China slumped.
In China, the company recorded a 4% decline in EBIT over the quarter ended 31 August to US$164m. Sales in the country grew 8% to $572m.
The outlook for China is also challenging, with future orders from September until January 2013 down 5%.
Speaking about the group's position in China, Nike brand president Charlie Denson told analysts: "The consumer is becoming more discerning and sophisticated.
"They want clearer choices, more innovation and better services tailored to them. At the same time, the economy is slowing, creating short-term impacts for any company doing business there. Certainly retailers are seeing profit challenges as the industry works to absorb excess inventory."
The company saw net income fall 12% to US$567m over the quarter as revenue increased 10% to $6.7bn, rising 15% on a currency neutral basis.
Gross margin declined 80 basis points to 43.5%. The company said gross margin continued to benefit from pricing actions and product cost reduction initiatives. However, this was more than offset by higher input costs, primarily materials and labour. It said margins were also affected by a shift in the company's mix to lower margin businesses within the Nike brand.
Sporting goods colossus Nike grew earnings ahead of revenues in the third quarter of fiscal 2013 thanks to a substantial increase in gross margins....
Leading apparel brands from the US are urging the Peruvian government to repeal legislation which allows suppliers to use short-term contracts to employ their workers....
US surf wear brand Quiksilver has announced a series of senior management changes as part of efforts to turnaround the business, following the appointment of a new president and CEO in January. ...
The following is a round-up of apparel and footwear news from the world's local media. just-style has not checked these stories so cannot guarantee their accuracy....
The most read stories on just-style this week include a look at the challenges Burma faces in becoming a competitive sourcing destination, Under Armour filing a trademark infringement lawsuit against ...
- MYANMAR SNAPSHOT: Textile and apparel industry
- Alliance members buy more products from Bangladesh
- Clothing seen as central focus for new Tesco CEO
- ANALYSIS: New pricing strategy pays off for Nike
- Indian apparel exporters discuss policy changes
- Crystal Group improves worker communication
- TIMELINE: Charney ousting from American Apparel
- Columbia Sportswear fined for mislabelled clothing
- “Made in USA” company rapped for deceptive claims
- VF Corp books "solid" Q2 performance
- Global market review of denim and jeanswear – forecasts to 2020
- Ethiopia – the emerging textile and clothing industry
- Management briefing: Sourcing shifts: Changes and challenges
- Plunkett's Apparel & Textiles Industry Almanac 2014: Apparel & Textiles Industry Market Research, Statistics, Trends & Leading Companies
- American Eagle Outfitters, Inc. : Reacting to a need for change