Nike fiscal 2nd-quarter profit jumps 40 percentDecember 19, 2013 @ 2:40 pm
BEAVERTON, Ore. (AP) - Nike's fiscal second-quarter net income jumped 40 percent, helped by higher average selling prices and an increase in revenue around the world.
Profit topped analysts' expectations, though revenue came in slightly short. Shares rose 39 cents in aftermarket trading, having closed at $78.26 before the report. The stock is up 52 percent year to date, and hit an all-time high of $80.26 last week.
The world's largest athletic goods maker said Nike brand sales grew across every product type and region. Sales of Converse brand items were especially strong in North America, Britain and China markets. Profit margins were helped by Nike's shift toward more profitable products and businesses, higher average prices and an easing in the cost of raw materials.
Nike is readying for three major athletic events in 2014, the Super Bowl, World Cup and Olympics. In a call with analysts Thursday, CEO Mark Parker said Nike has introduced its Brazilian and French World Cup uniforms, known as "kits," that are using new technology to be 16 percent lighter than the uniforms made for the 2012 Euro Championships. They're made of recycled polyester that use the equivalent of 18 recycled water bottles in every uniform.
Western Europe revenue rose 18 percent to $1.07 billion during the quarter, with future orders up 26 percent in that region. China, which has seen slowing growth, showed signs of improvement, and Parker said he was "very encouraged" by revenue growth of 8 percent to $629 million there.
The company said it had problems in Mexico as it began using a new third-party logistics provider, leading to a shortfall of inventory at retail stores. Nike expects to be "shipping to demand" by the end of the third quarter, but it will take a few quarters to fully regain business at retail.
At the end of the quarter, worldwide future orders for Nike brand shoes and clothes scheduled to be delivered between December 2013 and April 2014 rose 12 percent year-over-year to $10.4 billion.
Net income for the three months that ended on Nov. 30 rose to $537 million, or 59 cents per share. That compares with net income of $384 million, or 57 cents per share, last year. The company, based in Beaverton, Ore., said total revenue rose 8 percent to $6.43 billion from $5.96 billion.
Analysts expected earnings of 58 cents per share on revenue of $6.44 billion, according to FactSet.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
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