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.Consolidated gross margins for the quarter were 40.2 percent, up from 39.7 percent last year. Inventories were off 26 percent, excluding inventory at new Nike-owned operations. U.S. inventory was down 46 percent at the end of the first quarter.
Nike brand footwear and apparel revenue in the U.S. hit $749.9 million, an increase of 4 percent. International athletic footwear and apparel revenue grew 13 percent to $361.6 million. Sales of other brands, which include Cole-Haan, Tetra Plastics and Sports Specialities, slid 8 percent to $58.9 million, reflecting in part the absence of revenue from Nike's sport casual division, which was discontinued last September.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty