Strength in North America and Europe and from the Converse brand allowed Nike Inc. to beat earnings expectations for the first quarter and sent shares to all-time highs in after-hours trading.
The company broke out results for the Converse brand for the first time, reporting an 18.2 percent increase in quarterly revenue, to $494 million, and a 36.3 percent leap in operating profit, to $169 million. Nike said it would continue to seek expansion for the brand in the direct-to-consumer channel and, in the words of Nike’s president and chief executive officer Mark Parker, “unlock growth in apparel.”
Net income for the three months ended Aug. 31 was $780 million, or 86 cents a diluted share, 37.6 percent above the year-ago level of $567 million, or 61 cents. Revenues rose 7.7 percent to $6.97 billion from $6.47 billion in the prior-year quarter. Gross margin was lifted 120 basis points to 44.9 percent of sales from 43.7 percent.
On average, analysts expected earnings per share of 78 cents and revenues of $6.96 billion. Additionally, Nike’s closely watched future orders metric came in 8 percent above the year-ago mark, a figure that rose to 10 percent at constant currency. Inventories grew more slowly than sales, profits or future orders, moving up 6.4 percent to $1.05 billion.
Investors voiced their approval with the results, sending shares up $4.16, or 5.9 percent, to $74.50 in post-market trading following the disclosure of the results. They closed the regular trading session at $70.34, up 2.1 percent. The after-hours levels represent the highest for the Beaverton, Ore.-based firm since it completed its initial public offering in 1980.
In addition to the strength at Converse, the results were derived from strong, albeit single-digit, increases in both footwear and apparel, with the former category increasing 7.2 percent to $3.98 billion and the latter up 5.8 percent to $2.02 billion. Led by a 9.2 percent advance in North America, to $1.01 billion in sales, apparel grew in all regions with the exception of Japan, where sales were down 20.9 percent to $53 million while declining a more modest 1 percent at constant currency.
Nike logged mixed results in China, where the company is undergoing what Trevor Edwards, the new president of the Nike brand, called “a strategic reset.” Total revenues declined 0.5 percent, to $574 million, as apparel’s 8.8 percent increase, to $197 million, was insufficient to offset footwear’s 4.5 percent decline, to $341 million. However, operating income rose 3 percent, to $170 million, and advance orders in the market were up the same percentage.
“In our own Nike…doors, comp growth was up over 20 percent,” Edwards said. “The knowledge we’ve gained from these early successes can and will be leveraged across the entire market.” However, he cautioned that “the results in China will not always be linear.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast