Nike Inc.’s shares fell in after-hours trading on Thursday after the activewear giant reported a dip in its closely watched futures orders, along with second-quarter profits and sales that sprinted past Wall Street’s expectations.
This story first appeared in the December 19, 2014 issue of WWD. Subscribe Today.
Included in the sales numbers for the quarter ended Nov. 30 were growth rates of 18.1 percent to $4.27 billion in Nike brand footwear and 11 percent to $2.29 billion for the brand’s apparel.
Futures orders for the Nike brand fell considerably short of those lofty marks, with December-through-April orders, excluding Nike Golf and Hurley, up between 7 and 11 percent, not taking into account expected currency fluctuation. “The growth reflects continued strong demand for the Nike brand, even as we anniversary robust prior-year orders for global football [soccer] product in advance of the 2014 World Cup,” said Don Blair, chief financial officer, during a late afternoon conference call. “Excluding global football, total futures order growth this quarter was essentially in line with the numbers we reported last year.”
Futures orders, covering the September-through-January period, were up 11 percent, or 14 percent at constant currency, when Nike reported first-quarter results in September. The disparity pressured the stock, which in after-hours trading fell 2.8 percent to $94.40 after rising 2.7 percent to $97.08 during Thursday’s regular session. Shares finished 25 percent above their adjusted closing price of $77.69 at the end of 2013.
In the second quarter, net income grew 22.7 percent to $655 million, or 74 cents a diluted share, from $534 million, or 59 cents, in the comparable 2013 period. Revenues grew 14.8 percent to $7.38 billion from $6.43 billion.
Converse sales, reported separately from those for Nike brand merchandise, rose 20.6 percent to $434 million, while the brand’s earnings before interest and taxes increased 10.1 percent to $186 million.