Nike's fiscal 4Q profit rises 22 percent
Jun. 27, 2013
NEW YORK (AP) — Nike Inc., the world's largest athletic shoe and clothing company, on Thursday reported a 22 percent increase in fourth-quarter profit as strong sales in North America offset weakness in Europe and China.
Like most global companies, Nike has been dealing with Europe's recession-hit economies and a slowdown in growth in China. Nike has been reducing its inventory in China and reworking its offerings there to adapt to the changing tastes of Chinese customers. It also has been focusing on growth in North America, selling off less profitable brands like Umbro to focus on core brands like Nike.
The company said Thursday it earned $668 million, or 76 cents per share, in the three-month period ended May 31. That compares with $549 million, or 60 cents per share, in the year-ago period.
Revenue increased 7 percent to $6.7 billion from $6.24 billion. Nike, which is based in Beaverton, Ore., said that sales increased for Nike-branded running and basketball products as well as for men's and women's training categories. That offset declines in sportswear, action sports and soccer.
Analysts had expected 74 cents per share on revenue of $6.63 billion, according to FactSet.
By region, revenue in Nike's North American market rose 12 percent, offsetting a 1 percent decline in Western Europe and an 11 percent decline in Japan. In China, revenue was flat compared to the year-ago period.
Gross profit margins rose 1.1 percentage points to 43.9 percent for the quarter, fueled by higher selling prices and the easing of material costs.
Orders for Nike-branded shoes and clothing set for delivery between June and November of this year rose 8 percent globally, excluding the impact of currency fluctuations. That gauge, which Nike calls "future orders," rose 12 percent in North America. Emerging markets and Central and Eastern Europe also had gains. But that figure was flat in China and Western Europe.
In a conference call with investors following the report, Nike CEO Mark Parker said "The race in China is a marathon. It's not a sprint, and we're set for the long run."
After initially rising more than 3 percent in after-hours trading following the earnings report, Nike's stock slipped $1.57, or 2.5 percent, to $60.75. It ended the regular trading session up 47 cents to $62.32 in regular trading. The stock is up 21 percent so far in 2013.