Nike Profit Climbs 23%

(RTTNews) - Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, said Thursday after the markets closed that its second quarter profit rose 23% from last year, helped by higher revenue and improved gross margin.

The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue.

"Our strong second quarter results once again demonstrate NIKE is a growth company," said Mark Parker, Nike President and CEO.

However, as of the end of the second quarter, the company's worldwide futures orders for Nike Brand athletic footwear and apparel scheduled for delivery from December 2014 through April 2015 rose 7%, or 11% excluding currency changes, from a year ago. The growth rate was slower than the previous quarter, when worldwide futures orders increased 11%, or 14% excluding currency changes.

Nike shares are currently losing 3.17% in after hours trading after closing the day's regular trading session at $97.08, up $2.58 or 2.73%. The shares trade in a 52-week range of $69.85 to $99.76.

For the second quarter ended November 30, 2014, the Beaverton, Oregon-based company reported net income of $655 million or $0.74 per share, compared to $534 million or $0.59 per share for the year-ago quarter.

On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.70 per share for the second quarter.

Gross margin improved to 45.1% from 43.9% a year ago, mainly due to a shift in mix to higher margin products, continued growth in the higher-margin Direct-to-Consumer business and a modest benefit from foreign exchange.

Revenue for the second quarter rose 15% to $7.38 billion from $6.43 billion in the same quarter last year, driven by strong consumer demand across the portfolio. Twenty-four analyst had a consensus revenue estimate of $7.15 billion for the second quarter.

For the second quarter, Nike brand North America revenue rose 16% to $3.2 billion, while Western Europe revenue surged 22% to $1.3 billion and revenue from Central and Eastern Europe increased 17% to $346 million. Greater China revenue grew climbed 21% to $758 million but Japan revenue fell 5% to $199 million. Second quarter revenue from emerging markets rose 4% to $1.1 billion.

Footwear revenue for the quarter rose 18% to $4.3 billion, while apparel revenue increased 11% to $2.3 billion.

During the second quarter, Nike repurchased 5.1 million shares of its common stock for about $425 million as part of the four-year, $8 billion program approved by the company's Board of Directors in September 2012. As of the end of the second quarter, a total of 67.6 million shares had been repurchased under that program for $4.7 billion.