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NEW YORK — Energized by strong sales in the U.S., Nike Inc. delivered robust top- and bottom-line growth in its second quarter despite declining gross margins.
Net income for the quarter ended Nov. 30 rose 15 percent to $301.1 million, or $1.14 a diluted share, from $261.9 million, or 97 cents, in the same period last year. Revenues for the quarter rose 10.4 percent to $3.47 billion from $3.15 billion last year. Gross margins declined to 43.5 percent from 44.1 percent.
William D. Perez, president and chief executive officer of Nike, said in a statement that the quarter’s results were led “by the outstanding performance of the Nike brand in the U.S. and Americas regions.”
“In addition to the Nike brand, our other businesses also delivered double-digit growth in revenue and profits,” Perez added. The power of our Nike Inc. portfolio was evident this quarter, with strength in the U.S., China and Latin America balancing more challenging results in Western Europe and Japan. We feel very good about our business overall, and our prospects for delivering on our financial goals for the fiscal year.”
Total sales in the U.S. were up 15 percent while the Americas region swelled 33 percent. Its European, Middle East and Africa business was up 2 percent in the quarter while sales in the Asia Pacific region climbed 4 percent.
Regarding its futures orders, the firm said it is ahead of last year.
Nike said worldwide futures orders “for athletic footwear and apparel, scheduled for delivery from December 2005 through April 2006, [totaled] $5.2 billion, 2.5 percent higher than such orders reported for the same period last year.”
The company said changes in “currency exchange rates significantly reduced this growth relative to recent quarters, as global futures orders grew by 7 percent excluding the impact of currency changes.”
Nike said by region, futures orders for the U.S. are up 9 percent while Europe, the Middle East and Africa are down 6 percent. The Asia Pacific region is up 2 percent, while the Americas is up a staggering 23 percent.
This story first appeared in the December 21, 2005 issue of WWD. Subscribe Today.