Overseas Growth Fuels Nike

Spurred by Europe and Asia, Nike Inc. said Wednesday that second-quarter earnings increased 10.4 percent.

Spurred by Europe and Asia, Nike Inc. said Wednesday that second-quarter earnings increased 10.4 percent.

This story first appeared in the December 20, 2007 issue of WWD.  Subscribe Today.

Net income in the period ended Nov. 30 increased to $359.4 million, or 71 cents a diluted share, from $325.6 million, or 64 cents a diluted share, during the year-ago period.

Total sales jumped 13.5 percent to $4.3 billion from $3.8 billion during the same period last year.

European revenues increased 18 percent overall to $1.2 billion compared with $1 billion a year ago. A stronger euro helped revenue growth increase by 10 percentage points, the company said. Apparel revenues in Europe were up 15 percent and footwear increased 19 percent.

In the Asia-Pacific region, sales grew 17 percent, to $674.6 million versus $578.2 million last year. Sales in the Americas increased 19 percent to $313.6 million from $262.5 million.

Nike’s U.S. business increased 7 percent during the quarter, to $1.5 billion from $1.4 billion last year. Athletic footwear constituted the largest share of those sales, with a boost of 12 percent to $983.3 million in revenues. Apparel revenues declined 3 percent to $461.4 million.

“Our second quarter was another great one, and it illustrates the ability of our portfolio to deliver consistent, profitable growth,” Mark Parker, president and chief executive officer, said in a statement.

The company continues to focus its strategy on the parts of its business with the greatest growth opportunities, Parker said. In mid-November, Nike announced that it was selling the Starter brand to Iconix Brand Group for $60 million in cash. The deal was completed on Monday. The company is also looking to sell its Bauer Hockey business.

“Our focus on prime growth opportunities extends throughout our portfolio of brands. We are confident that our divestiture decisions this quarter are the right ones for Bauer Hockey, for Starter and for Nike,” Parker said.

Nike also acquired a new business during the quarter, purchasing Umbro plc for $570 million, or 285 million pounds.