New Markets Aid Nike’s Full-Year Profit Rise

Nike

Although not an official World Cup sponsor, Nike’s “Write the Future” campaign, seen here emblazoned on a Johannesburg, South Africa skyscraper, has generated buzz and may help sales.

Beaverton, OR–Revenue surges from emerging markets helped Nike to post today a full-year net profit of $1.9 billion, up 28% on last year. But the sporting goods giant’s underlying net earnings edged up only 2%, as full-year revenues fell 1% to $19 billion and mature markets posted revenue declines.

For exmaple, full-year revenues in North America fell 1%, Western Europe was down 6%, Central and Eastern Europe slumped 16%, Japan declined 5% and Greater China was flat.

However, revenues from emerging markets rose 20% to hit $2 billion. The company’s performance in the fourth quarter to May 31 showed some improvement, with global revenues up 8% to $5.1 billion and net profit up 53% to $522 million (underlying up 7%).

There were single-digit revenue increases in North America and Europe, while Greater China was up 12% and emerging markets surged up 47%. But Japan was down by a further 8%.

Nike’s futures orders for the June to November period were up 7% to $8.8 billion, reflecting a mixed picture in the company’s markets. Excluding currency changes, all major markets showed an increase in orders–except for Japan, where orders were down 16%.

But orders for Europe were hit by the weakening euro, transforming underlying increases into a reported 2% decline for both Western Europe and Central and Eastern Europe.

“We finished strong with a great quarter and accelerating momentum across the business,” said Mark Parker, Nike president and ceo. “Nike is at its best when we focus on our two core values–innovation and inspiration. Going forward you can expect to see… a laser focus on operational and financial excellence.”

Like this? Share it!