Nike 1st quarter net income falls as higher revenue is offset by higher costs
Posted Sep 27, 2012 05:27:06 PM.
This article is more than 5 years old.
BEAVERTON, Ore. – Nike said Thursday its fiscal first-quarter net income fell 12 per cent as higher sales of its clothing and footwear brands was offset by higher costs and increased ad spending.
Results beat expectations but shares fell 2 per cent in aftermarket trading as investors worried about a slowing of futures orders, which indicate future demand.
Nike, like other consumer products makers, is facing high costs for materials and labour, as well as an uncertain economy in Europe and a slowdown in China. The Beaverton, Oregon-based company has raised prices and cut costs in response.
The world’s largest athletic shoe and clothing company says net income for the three months ended Aug. 31 fell to $567 million, or $1.23 per share. That compares with net income of $645 million, or $1.36 per share, last year. Analysts expected the company to earn $1.12 per share
Revenue rose 10 per cent to $6.67 billion from $6.08 billion last year. Analysts expected $6.43 billion.
Revenue jumped 23 per cent in North America, Nike’s largest market, to $2.7 billion. In Europe, revenue fell 5 per cent to $1.17 billion. In China, revenue rose 8 per cent to $572 million.
Selling and administrative expenses rose 18 per cent as the company spent heavily on marketing for the Olympics and the European Football Championships.
Futures orders, that is orders scheduled for delivery between September 2012 through January 2013, rose 6 per cent, compared with a 16 per cent increase in the same quarter last year. Greater China was a weak spot, with orders down 5 per cent. A year ago, Greater China futures orders surged 27 per cent.
After finishing the day up 51 cents at $96, shares fell $2 to $94 in aftermarket trading.
