Nike Inc. the world's largest maker of athletic shoes and apparel, said Thursday after the markets closed that its first quarter profit rose 15% from last year, as higher sales, better expense management and a lower effective tax rate helped offset lower gross margins. The company's quarterly earnings per share also handily beat analysts' estimate as did its quarterly revenue.
The Beaverton, Oregon-based company reported net income for the first quarter of $645 million or $1.36 per share, compared to $559 million or $1.14 per share for the year-ago quarter.
On average, 19 analysts polled by Thomson Reuters expected the company to earn $1.21 per share for the first quarter.
Gross margins for the quarter fell to 44.3% from 47.0% a year ago, mainly as a result of higher product costs and a higher mix of off-price revenues sold at a lower margin than the prior year.
Revenues for the first quarter increased 18% to $6.08 billion from $5.18 billion in the same quarter last year. Excluding changes in currency exchange rates, first quarter revenues grew 11% from a year earlier. Eighteen analysts had a consensus revenue estimate of $5.75 billion for the first quarter.
For the first quarter, footwear sales rose 19% to $3.3 billion, while apparel sales increased 16 to $1.6 billion and equipment sales surged 24% to $342 million.
First quarter North America revenues increased 16% year-over-year to $2.2 billion, while revenue for Western Europe rose 14% to $1.2 billion and Central and Eastern Europe revenue surged 24% to $334 million.
Revenue for Greater China climbed 15% to $528 million in the first quarter, while Japan revenue rose 17% to $191 million. First quarter revenue from emerging markets jumped 35% to $799 million from $591 million a year ago.
Revenue from the company's other businesses, which includes Cole Haan, Converse Inc., Hurley International LLC, Nke Golf, and Umbro Ltd., increased 10% to $762 million in the first quarter.
Worldwide future orders for Nike brand athletic footwear and apparel, scheduled for delivery from September 11 to January 2012, rose 16% from last year to $8.5 billion.
By region, futures orders for the North America region were up 16%; Western Europe rose 9%, Central and Eastern Europe increased 17%, Greater China jumped 27%, Japan down 10% and emerging markets futures orders surged 22%. At the end of the first quarter, global inventories stood at $3.1 billion, up 41% from from a year ago.
"We're off to a strong start in fiscal year 2012. We have a powerful and diverse portfolio of brands and businesses, and we're focused on leveraging them to drive growth and create value for our shareholders," said Nike CEO Mark Parker.
