North America and emerging markets boost Nike Q2

Nike Inc has booked a 9% jump in profit from continuing operations during it second quarter, helped by growth in all key categories, product types and geographies except China.

The Beaverton, Oregon based firm said its net income in the three months to 30 November rose 9% to $521 million, or $1.14 per share, up from $480 million, or $1.03 a share, in the same period last year.

However, including $137 million in losses linked to its sale of the Umbro and Cole Haan businesses, net income fell 18% to $384 million, down from $469 million a year ago.

Despite its overall profit gains, gross margin fell 30 basis points to 42.5%, with higher sale prices and lower material costs offset by higher labor costs and unfavorable exchange rates. Margins were also hurt by the sale of more lower margin products.

Total revenue rose 7.4% to $5.96 billion. Excluding the impact of changes in foreign currency, North American revenues were up 17% to $2.4 billion, Western Europe rose 4% to $897 million, Central and Eastern Europe climbed 7% to $266 million, and emerging markets surged 18% to $1.05 billion. But China revenues fell 12% to $577 million.

Worldwide futures orders suggest this momentum will continue. For Nike brand athletic footwear and apparel, scheduled for delivery from December 2012 through April 2013, orders totalled $9.3 billion – 6% higher than the same period last year.

“Our strong second quarter results show that our growth strategies are working, even under challenging macroeconomic conditions,” said Mark Parker, president and CEO.

“We have a focused and flexible portfolio that allows us to target the biggest growth opportunities at all levels — brand, category and product. We stay connected with our consumers and that enables us to deliver innovations that excite the marketplace, grow the business and deliver more value to shareholders.”

For more fashion and apparel industry news, go to just-style.com

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