Nike’s Q1 sales jump 18% spurred by growth in emerging markets, shares up
Athletic apparel maker Nike (NYSE:NKE) posted stronger than expected first-quarter results late Thursday as growth in North America and emerging markets lifted sales 18%.
The Beaverton, Oregon-based company's stock jumped 6.72% to $89.84 Friday afternoon on the New York Stock Exchange.
For the three months ended Aug. 31, the shoe retailer saw revenue grow 18% to $6.1 billion. That is up from $5.1 billion, a year ago.
Excluding the impact of foreign currency changes, Nike brand's revenues rose 12% with growth in every geographic division except Western Europe.
Sales were flat in Western Europe due to the negative impact from changes in the timing of shipments and comparisons to last year's strong World Cup-related sales.
Nike's net profit rose 15% to $645 million, or $1.36 per fully diluted shares, up from $559 million, or $1.14 per fully diluted share. That beats Wall Street forecasts on earnings of $1.21 from revenues of $5.75 billion, according to Thomson-Reuters.
In North America sales were up 15%, while sales in emerging markets were up 24%. Japan, which had been affected by a tsunami and earthquake earlier this year, reported sales of 5%.
Gross margin fell 270 basis points to 44.3% stemming from higher product costs and a higher mix of off price revenues sold at lower margins than the previous year.
Nike's inventories went up 41% to $3.1 billion because of higher average unit product cost, growth in total units and changes in foreign exchange rates. Future orders for Nike, a closely watched measure of demand in the ensuing months, grew up 16% to total $8.5 billion.
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