Sales were up sharply in North America and key foreign markets despite stronger dollar.
Nike reported a 7% jump in revenue for the latest quarter, as the athletic-gear maker notched solid sales of shoes and apparel in North America and key markets abroad. But revenue would have increased 13% had it not been for the stronger dollar, which has hurt results for many U.S. multinational corporations recently. Here’s what you need to know from Nike’s earnings report.
What you need to know: Nike’s NKE revenue grew in all four of the largest regions it serves, including double-digit growth in Western Europe and Greater China and a 6% increase in North America. However, the stronger dollar ate into the sales Nike pulled in from Central and Eastern Europe and Japan. That led Nike to report sales declines in those regions.
Still, the world’s largest athletic-gear maker is performing well at home. Nike, Under Armour UA and other rivals in the U.S. are generating stronger sales in part due to the “athleisure” trend — athletic gear is being increasingly worn not only at the gym, but also for errands around town and as daily clothing not meant for athletic activities. Under Armour and athletic retailers like Foot Locker FL and Dick’s Sporting Goods DKS and many others that compete in the space reported stronger-than-expected profit growth for the holiday period.
And Nike still sees opportunities to succeed beyond where it already dominates the field. For example, company is hopeful a new focus on women’s bras, tights and other apparel can add $2 billion to annual sales by 2017.
The big number: Profits climbed 16% to $791 million for the period ending February 28, with per-share earnings rising to 89 cents, better than the 84 cents projected by Wall Street analysts. Revenue rose 7% to $7.46 billion. Future orders, which are a closely watched key indicator of growth, rose 11% excluding currency changes. Analysts had projected a 9.9% jump. Future orders are for Nike-branded footwear and apparel scheduled for delivery between March and July, though the company cautions that the figure doesn’t necessarily reflect actual revenue growth.
What you might have missed: Results from Nike, which was added to the Dow Jones Industrial Average in 2013, get a lot of press attention and for good reason. The company is huge brand at retail that still manages to report enviable growth despite its size and market share. But notably, while sales of apparel and shoes continue to hum along, the smaller sports equipment segment, which includes products like golf clubs and baseball gloves, isn’t performing as well. For the first nine months of the current fiscal year, equipment sales have slipped 1%, far underperforming the 8% jump for apparel and the 15% increase for footwear, Nike’s largest business.