Nike Inc. said Thursday that second-quarter net income fell 4 percent, partially due to softness in apparel sales, yet the athletic clothing and footwear manufacturer still topped analysts’ estimates.
The Beaverton, Ore.-based vendor said that for the period ended Nov. 30, net income slid to $375.4 million, or 76 cents a diluted share, compared with $391 million, or 80 cents, in the year-ago quarter. Revenues dipped 4 percent to $4.41 billion from $4.59 billion a year earlier. Analysts polled by Yahoo expected earnings per share of 71 cents on sales of $4.4 billion.
For the first half, Nike posted a 1.5 percent dip in profits to $888.4 million, or $1.80 a diluted share, versus $901.5 million, or $1.83, in the same year-ago period. Revenue slipped 8.2 percent to $9.2 billion from $10.02 billion.
For the quarter, Nike said footwear sales shrank 1 percent to $2.32 billion, while apparel sales contracted 10 percent to $1.27 billion. Equipment sales fell 8.3 percent to $241.2 million, but global brand division sales, which included sales from Cole Haan, Converse, Hurley, Nike Golf and Umbro, mushroomed 56.3 percent to $25 million.
North America experienced a 4.2 percent decrease in revenue to $1.5 billion, while Western Europe recorded a decline of 6.5 percent to $901.6 million. Central and Eastern Europe registered a 24 percent drop to $260.3 million, while China had a 3.4 percent dip in revenues to $403.9 million. Japan’s revenue fell 2.1 percent to $222.4 million, but sales in emerging markets rose 8.4 percent to $554.6 million.
“While consumers are gaining confidence, they remain cautious and prudent,” said president and chief executive officer Mark Parker in a conference call to Wall Street analysts.
Parker added that, despite the “revenue dip,” the second quarter shows Nike was able to “deliver the appropriate level of financial performance in a rapidly changing environment.”
Parker pointed to a 10 percent reduction in inventory levels for the quarter, and spoke of product innovation in soccer, noting the company’s recent investment in the sport, paired with the upcoming World Cup, will create “the perfect storm.”
The company said worldwide futures orders scheduled for delivery from December 2009 through April 2010 grew 4 percent to $7 billion from a year ago, but reported orders would have fallen 1 percent when excluding currency changes. Emerging markets led the way with a 38 percent jump in future orders, which translates to a 27 percent increase on a constant currency basis. Future orders from Japan declined 10 percent, or 9 percent on a constant currency basis, while North America had a 4 percent decline overall.
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