US: Nike warns on higher costs as Q3 disappoints
- Q3 profit rose 5% to $523m
- Gross margin down to 45.8%
- Revenues rose 7% to $5.1bn
Shares in Nike Inc fell nearly 6% in trading yesterday (17 March) after the sportswear giant's third quarter earnings missed expectations and it warned that rising oil, cotton and transport costs are set to continue to affect its near-term profitability.
Net income in the three months to 28 February rose 5% to $523m or $1.08 per share, up from $497m or $1.01 per share a year earlier.
But higher product and freight costs combined to push Nike's gross margin down by 110 basis points to 45.8% - and were unable to offset a higher mix of full-price sales.
Revenues rose 7% to $5.1bn, led by Nike brand sales which were up 8% thanks to growth in all categories and every geography except Japan. Growth in the Converse, Cole Haan, and Hurley brands was largely offset by lower revenues in Umbro and Nike Golf.
Futures orders, an important measure of upcoming demand, are up 9% (excluding currency exchanges) for Nike athletic footwear and apparel scheduled for delivery from March through July 2011 - a total of $7.9bn. Demand is being led by emerging markets (up 18%) and Greater China (up 13%), the company said.
While the goal for many clothing manufacturers and brands is to gain an international presence, there is a key risk associated with selling the same designs in different global markets - the more far ...
Mexico's leading footwear fair Sapica closed last week with more promises from global shoe brands to switch their sourcing to Leon, the nation's manufacturing hub, in coming months....
Featured research this week includes a look at the luxury goods sector, insight into the latest developments in computer aided design and an analysis of the Australian wool wholesaling sector....
Swedish fashion retailer H&M was ranked as the world's number one user of organic cotton last year - taking it closer to its goal of only using cotton from more sustainable sources by 2020....
Neither the recession nor unstable economies have put a damper on the fast-growing organic textiles industry, according to a new report, which shows the sector grew by 20% to an estimated $5.61bn in 2...
A conference on sustainability issues in the textile industry taking place in Barcelona later this year has added an extra workshop session on Greenpeace's Detox Campaign to eliminate the release of h...
- Slow fashion: a fast-growing opportunity?
- Rethink needed as low-cost labour options dwindle
- African apparel sector needs cooperation to thrive
- New wage ladder lifts workers towards living wages
- US retailers to face logistics issues into 2015
- Long-running SL Garment dispute settled
- Gap unveils management changes as Q3 profit rises
- Tazreen Fashions compensation agreement outlined
- Puma commits to 100% PFC removal
- US apparel prices continue to fall