The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
BEAVERTON, United States — Nike Inc., the world's largest sporting-goods company, posted second-quarter profit that topped analysts' estimates as higher-priced shoes boosted sales.
Net income in the three months through November rose 40 percent to $537 million, or 59 cents a share, from $384 million, or 42 cents, a year earlier, the Beaverton, Oregon-based company said today in a statement. Profit excluding some items was 59 cents a share. The average of 24 analysts’ estimates compiled by Bloomberg was 58 cents.
Chief Executive Officer Mark Parker has been introducing premium products that sell for higher prices, such as $160 Flyknit running shoes and $225 Hypervenom soccer cleats, while bolstering the company's online business. Nike's gross margin, the percentage of sales left after subtracting the cost of goods sold, expanded 1.4 percentage points to 43.9 percent.
“The growing global health and wellness trend plus strong product innovations are driving Nike’s business,” Jay Sole, an analyst at Morgan Stanley in New York, said in a note before the results were released. He rates the shares overweight, the equivalent of a buy.
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Nike was little changed at $78.31 at 4:20 p.m. in New York. The shares gained 52 percent this year through the close of regular trading today, compared with a 27 percent increase for the Standard & Poor’s 500 Index.
Sales rose 8 percent to $6.43 billion. Analysts projected $6.44 billion, on average.
Orders for the Nike brand from December to April rose 13 percent, excluding the effects of foreign-currency exchange-rate fluctuations. Analysts estimated a 9.6 percent gain, on average.
By Matt Townsend; Editors: Kevin Orland, James Callan
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