NEW YORK — Expansion in overseas markets helped Nike Inc. overcome slower growth in the U.S. and report stellar fourth-quarter results.
The firm on Thursday posted an 18.1 percent jump in fourth-quarter net income to $246.2 million, or 92 cents a diluted share, for the three months ended May 31 from $208.4 million, or 77 cents, in the same period last year. Revenue rose 11.3 percent to $2.99 billion from $2.68 billion a year ago.
Donald Blair, chief financial officer, pointed out during a conference call with Wall Street analysts that business outside the U.S. delivered 16 percent growth during the quarter and for the first time, grew faster than the U.S. region.
Last year, Blair said, the company delivered “a lot of that cash back to shareholders,” buying back 1.4 million shares for $76 million, part of a four-year, $1 billion share repurchase program approved by the board in June 2000, the company’s second such plan.
In the U.S., revenues rose 2 percent to $1.2 billion, with apparel revenues growing 16 percent to $345.7 million. For the year, U.S. revenues were flat, with apparel revenues up 8 percent to $1.4 billion. According to the cfo, the quarter was the most difficult and challenging faced in the U.S.
In Europe, which includes the Middle East and Africa, revenues for the quarter rose 24 percent to $945.3 million as apparel revenues rose 14 percent to $288 million. For the year, revenues rose 20 percent to $3.2 billion, with apparel revenues up 16 percent to $1.1 billion.
Asia Pacific, one of Nike’s fastest-growing regions, saw revenues rise 22 percent to $362.6 million, with apparel picking up 14 percent to $133 million. For the year, sales were up 19 percent to $1.4 billion, and apparel revenues jumped 24 percent to $499.3 million.
Revenues in the Americas region, which excludes the U.S., inched up 1 percent to $143.8 million, with apparel revenues up 4 percent to $39.2 million. For the year, revenues declined by 7 percent to $527 million, while apparel revenues were down by 11 percent to $148.1 million.
Charles Denson, president of the Nike brand, noted that the firm expects solid international growth for fiscal 2004, particularly in the Asia Pacific region. The growth is expected to increase in the Japanese, Korean and Chinese markets. Sales for the year in Japan grew 17 percent for footwear and apparel, while sales in Korea grew 44 percent. Sales in China rose 39 percent and exceeded the $100 million level. Europe, he noted, remains one of the firm’s most “consistent” growth regions.
In the U.S., Denson added, Nike’s contentious relationship with Foot Locker affected sales, and that business hasn’t yet stabilized. In addition, the company expected to see more of a turnaround during last year’s holiday season, but that didn’t materialize, with the U.S. gaining just 2 percent in revenues.
Nike said that worldwide future orders for athletic footwear and apparel, scheduled for delivery between June and November 2003, total $4.9 billion, or 4.4 percent higher than last year. At the end of the fiscal year, global inventories were $1.5 billion, a rise of 10 percent from a year ago.
For the year, income fell by 29 percent to $474 million, or $1.77 a share, from $663.3 million, or $2.44, a year ago. The decline was due mostly to a one-time accounting charge. Excluding the charge, income was $740.1 million, or $2.77 a share. Revenues rose 8.1 percent to $10.7 billion from $9.89 billion.
If not for the accounting charge, last year would have been Nike’s most profitable ever, a point made by Blair and Nike chief executive Philip Knight.