Byline: Valerie Seckler
NEW YORK — Nike Inc. is on track to score apparel sales of at least $1 billion this year.
Powered by strength in its team sports business and growth in women’s revenue, Nike’s activewear sales in the U.S. nearly doubled in its fiscal first quarter to a record $182.5 million, against $94.7 million, the firm reported Monday. International activewear sales rose 48 percent to $126 million from $85 million. Overall, apparel sales in the quarter rose 71 percent to $308.5 million from $179.9 million.
The performance sparked Nike’s first-quarter earnings, which surged 56 percent to $164.8 million, or $2.26 per share, from $105.9 million, or $1.43.
The earnings, also a record, topped Wall Street’s average earnings estimate of $1.88 per share by 20 percent.
Overall sales at the athletic shoe giant shot up 38 percent in the quarter ended Aug. 31 to $1.6 billion from $1.17 billion.
Nike stock gained 7 1/8 to close at a 52-week high of 99 5/8 Monday on the New York Stock Exchange.
With its stock nearing the century mark, Nike said its board authorized a two-for-one stock split, which shareholders approved at its annual meeting Monday. The stock dividend will be paid Oct. 30 to shareholders of record Oct. 9.
“We’re definitely comfortable with analysts’ estimates we’ll hit the billion dollar mark this year,” a Nike spokesman said Monday when asked how large its apparel business will grow.
“For the trailing 12 months ended Aug. 31, our worldwide orders for apparel were over $1 billion for the first time,” he added, declining to furnish a specific figure.
Faye Landes, analyst at Smith Barney, said apparel sales growth of 93 percent and “the fact they could blow past tough year-ago comparisons on apparel and footwear orders” for delivery between now and January, were the highlights of Nike’s quarter.
“It’s not too often that we see anything go up 93 percent,” she noted, adding that Nike’s high tech performance apparel is doing extremely well. Nike divides its apparel business into four segments: fundamentals, sports-style items geared to specific activities; authentic team sports collections, and performance wear.
Nike reported worldwide future orders for apparel and athletic shoes hit a record $2.3 billion in the quarter, up 32 percent from a year ago.
Nike chairman Philip Knight said in a statement the company was encouraged by the pace of futures orders, “particularly in light of the 28 percent increase recorded for the same period last year.
“This acceleration was driven, in large part, by strong future orders for both our international and U.S. apparel businesses.”
Although Nike doesn’t disclose figures for apparel and footwear orders, a spokeswoman said that as of Aug. 31, apparel orders had rocketed 134 percent in the U.S. and 33 percent worldwide.
International apparel sales are growing fastest in France, Germany and Japan, she continued, which, along with improved women’s sales, has widened the apparel business’s scope.
The athletic shoe giant, which historically has been more successful marketing to men than women, plans to extend its organized team sports business to include the ranks of women collegiate basketball players.
Nike also is outfitting six women on the 1996 U.S. Olympics basketball team including former Texas Tech star Sheryl Swoopes. Nike already produces a women’s signature basketball shoe bearing Swoopes’ name.
The Nike spokeswoman noted the firm has enjoyed a “halo effect” from signing such female endorsers as Swoopes and tennis star Monica Seles. “Our tennis apparel is growing like crazy,” she said. “You’re seeing women wearing tennis clothes increasingly for other uses.” — Fairchild News Service