BEAVERTON, Ore. -- Sales of athletic apparel at Nike advanced 2.1 percent in the fiscal first quarter to $179.9 million from sales of $176.2 million a year earlier.
Providing the lift was a 13.5 percent gain in international apparel revenue, which grew to $85.1 million in the quarter ended Aug. 31 from $75 million. Sales of apparel in the U.S. declined 6.4 percent, amounting to $94.7 million against $101.2 million.
In a conference call with financial analysts, Nike president Richard Donahue commented on the falloff in U.S. sales in the quarter, saying, "The apparel drop is just a slow start. Futures are very strong and year-to-year comparisons should be strong. The downturn in apparel has stopped."
In a statement, Nike said of its futures orders for the next five months, "Our U.S. apparel orders are very strong, indicating a return to healthy growth after two years of slight declines." Nike apparel rang up sales of $338.5 million in the U.S. in the most recent fiscal year ended May 31, down 6.1 percent from sales of $360.5 million in fiscal 1993.
Nike officials declined to specify figures for apparel bookings.
Asked what had stemmed the U.S. sales slide, a Nike spokesman credits the fact that, late in the last calendar year, apparel was reorganized as its own stand-alone business.
Overall, apparel generated 15.4 percent of Nike's first-quarter revenue, compared with 15.9 percent in the first quarter a year ago.
Nike's earnings in total fell 7.1 percent in the quarter, to $106 million, or $1.43 a share, versus $114.1 million or $1.49. As reported, Nike had projected its first-quarter earnings would range from $1.35 to $1.45 a share, falling short of the $1.45 to $1.75 analysts had estimated. Executives cited inventory shortages and first-quarter spending levels in Asia and Europe as reasons.
Companywide revenue in the first quarter increased 6.4 percent to $1.17 billion, from $1.11 billion, bolstered by market-share gains in several footwear categories. Sales expanded 55 percent in outdoor, 31 percent in walking, 27 percent in tennis, 17 percent in cross-training, and 11 percent in running.
Nike's selling, general and administrative expenses rose to 25 percent of first quarter sales from 21.6 percent a year ago. Nike blamed the increase on its costs abroad and said that it expects this year's SG&A expenses to equal or possibly even slightly exceed last year's 25.7 percent.
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