Nike Inc. (NKE), the world’s largest sporting-goods company, posted fiscal first-quarter profit that topped analysts’ estimates after demand for running and basketball shoes helped North American sales.
Net income in the quarter ended Aug. 31 rose 38 percent to $780 million from $567 million a year earlier, the Beaverton, Oregon-based company said in a statement yesterday. Earnings per share from continuing operations were 86 cents. The average of estimates compiled by Bloomberg was 78 cents.
Chief Executive Officer Mark Parker has been introducing products, including updates to the Flyknit line of shoes, to capture a greater share of the market for running gear. Flyknit shoes, which feature upper portions woven from a single thread, sell for $150 or more, helping Nike maintain profitability in the face of higher labor costs.
Nike rose 6.3 percent to $74.80 in extended trading yesterday after the close in New York. The shares had gained 36 percent this year through the close, compared with a 19 percent increase for the Standard & Poor’s 500 Index.
Orders for the Nike brand from September to January, excluding the effects of currency exchange-rate fluctuations, rose 10 percent. The average estimate of six analysts was a 7.7 percent gain.
Nike’s gross margin, the percentage of sales left after subtracting the cost of goods sold, widened to 44.9 percent from 43.7 percent, on falling prices for raw materials and less discounting. Analysts estimated 43.8 percent, on average. The increase was the third straight after nine consecutive declines caused mostly by rising labor costs.
In China, which had been one of Nike’s fastest-growing markets, sales excluding currency fluctuations fell 3 percent to $574 million for a fourth straight decline. Orders in China on that basis rose 2 percent, compared with analysts projecting a gain of 0.5 percent.
“I’m not sure if the problems in China are behind them,” Swinand said. “It’s not getting worse.”
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