Beaverton, OR—Nike Inc. reported Thursday afternoon that its second quarter profit rose 40% due to higher average selling prices and sales increases that narrowly missed estimates.
For the quarter ended Nov. 30, the athletic footwear, appeal and accessories company posted net income of $537 million, or 59 cents a share, compared with net income of $521 million, or 57 cents a share, a year earlier. (Results from a year ago included a $137 million loss from discontinued operations). Analysts’ average estimate expected 58 cents a share.
North American Sales Up 9%
Net revenue rose 8% to $6.4 billion, narrowly missing analysts’ expectation for $6.44 billion in sales.
“Our strong second quarter results show why Nike leads the industry,” Nike CEO Mark Parker said. “Our powerful portfolio fuels growth across our categories and geographies.”
By region, Nike North America posted 9% growth while Western Europe was up 18%.
Among smaller markets, revenue in Central and Eastern Europe increased 17% and China was up 8%. Sales in Japan slid 13%.
Sales at Converse were up 14% on growth in the United Kingdom, North America and China.
Gross margin widened 140 basis points to 43.9% from 42.5% a year ago, due to a shift to higher margin products, better prices and lower raw materials costs.
Global future orders, a closely-watched metric, stood at $10.4 billion, which is 12% higher than second quarter last year. Analysts had expected futures to rise only 9.7%.
Nike said its inventories climbed 11% to $3.7 billion. Expenses rose 14% to $2.1 billion.
Last month, Nike bumped its dividend up by 14% in an effort to return more cash to shareholders.
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