For the quarter ended Nov. 30, Nike posted net income of $469 million, or $1 a share, compared with $457 million, or 94 cents a year ago. That was better than analysts’ average expectation for earnings of 97 cents. Nike’s profit has surpassed projections in 21 out of 22 quarters.
Net revenue rose 18% to $5.7 billion, up from $4.8 billion during the same quarter last year.
Early 2012 Orders Up 13%
Nike said sales grew in every region of the world except Japan. In North America, its largest market, sales rose 21% to, led by sales of running shoes. Revenue from China increased 28% to $650 million.
“Our strong second quarter results demonstrate that the Nike Inc. portfolio is a powerful engine for growth,” Nike’s CEO Mark Parker said.
Moreover, the company said future orders, which would be delivered from December through April 2012 were up 13% from a year ago to $8.9 billion.
But as the company discounted more merchandise than expected, its gross margin edged down to 42.7%, 260 basis points worse than the prior-year quarter. Nike said it expects gross margin to narrow further, probably 1.5 percentage points in its third quarter.
“There’s a lot of companies that are facing the same problem, it’s industry wide,” said Matt Arnold, an analyst Edward Jones & Co. in Des Peres. But that “would be more of a concern if Nike weren’t growing sales and hadn’t scheduled more price increases for early next year.”
Nike repurchased more shares than expected and that may have helped them beat analyst projections, according to Chris Svezia, analyst for Susquehanna Financial Group.