US: Nike's 22% hike in Q2 profit offset by future orders
- Q2 profit up 22% to $457m
- Sales rose 10% to $4.84bn
- 11% rise in future orders below analysts' expectations
Strong sales and clean inventories have helped sportswear and equipment giant Nike Inc to a 22% hike in second quarter profit, but shares fell nearly 6% after an 11% rise in future orders came in below analysts' expectations.
"We had a great second quarter. Almost every brand, category and geography delivered growth," said Mark Parker, president and CEO.
"We continue to outperform the market thanks to our innovative product, compelling brands and strong marketplace management. That's good for athletes and consumers, good for our industry, and it's good for our shareholders.
The Beaverton, Oregon based firm said net income in the three months to 30 November climbed to $457m or $0.94 per share, up from $375m or $0.76 per share a year earlier.
Sales rose 10% to $4.84bn, and rose 11% excluding currency fluctuations. Revenues for the Nike Brand were up 9%, driven by growth in all seven categories except sportswear, which was down slightly compared to the prior year. Growth was also seen in every geography except Japan, the company said.
There was also good news on the margin front, after higher mix of full-price sales, as well as improved profitability from the company's direct to consumer operations lifted gross margins by 80 basis points to 45.3%.
But the market instead focused on Nike's warning about the impact of cost pressures on margins, including additional airfreight costs incurred to meet strong demand for its products.
And an 11% rise in futures orders to $7.7bn for Nike brand athletic footwear and apparel, scheduled for delivery from December 2010 through April 2011, was lower-than-expected.
Despite analysts' concerns, CEO Parker remains buoyant. "Going forward, we're in the enviable position of having far more opportunities than challenges," he said. "I'm confident our strategies can continue to deliver sustainable, profitable growth."
Sporting goods giant Nike has announced that two of its board members - Jill Conway and Ralph DeNunzio - will not stand for re-election later this year....
US footwear group Collective Brands has announced that Matthew Rubel has resigned as chairman of the board and chief executive officer of the company. ...
Phuoc Long Joint Stock Co (PLI) has signed a licensing agreement with French manufacturer Lagardere Active to produce and sell its fashion brand Elle in Vietnam....
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