• Q3 earnings grow 20% to US$1.1bn
  • Gross margin up 140 bps
  • Revenue increases 5% to $8.4bn
Total revenues increased 5% to $8.4bn, up 7% on a currency neutral basis

Total revenues increased 5% to $8.4bn, up 7% on a currency neutral basis

US sporting giant Nike booked what it called a "solid" third-quarter after delivering a double-digit profit hike and witnessing demand for its namesake brand across all geographies.

Net income in the three months to the end of February grew 20% to US$1.1bn from $950m a year earlier, while gross margin contracted 140 basis points to 44.5%, as higher average selling prices were more than offset by higher product costs, unfavourable changes in foreign exchange rates and the impact of higher off-price sales.

Total revenues increased 5% to $8.4bn, up 7% on a currency neutral basis. Sales for the Nike brand grew 7% to $7.9bn, driven by double-digit growth in Western Europe, Greater China and the emerging markets as well as the sportswear and Jordan brand categories.

Sales for Converse, meanwhile, were up 3% to $498m, driven by growth in North America.

In the group's North America business, sales edged up 3% to $3.78bn, while Western Europe sales grew 4% to $1.5bn. Greater China sales, meanwhile, were up 9% to $1.08bn.

"The power of Nike's diverse, global portfolio delivered another solid quarter of growth and profitability," says Nike CEO Mark Parker. "To expand our leadership and ignite Nike's next phase of growth, we're delivering a relentless flow of innovation through performance and style, increasing speed throughout the business and creating more direct connections with consumers leveraging digital and membership."

FBR & Co analyst Susan Anderson, notes: "We like Nike's innovation pipeline, international runway, and long-term margin catalysts, but we remain on the sidelines and look for improved revenue growth, margin execution, and lower inventory growth."