Sports shoe and clothing giant Nike's profit is up. Photo / Reuters
Sports shoe and clothing giant Nike's profit is up. Photo / Reuters
KEY POINTS:
Nike has posted a 51 per cent rise in quarterly net profit, helped by a tax benefit and a weak-dollar boost to revenue, and its shares rose 1.6 per cent as the results topped Wall Street targets.
The world's largest athletic shoe and clothes maker also raised itsfiscal 2008 revenue outlook and said it was exploring a sale of its Nike Bauer Hockey division, which makes hockey equipment and apparel.
Net income in the latest quarter rose to US$569.7 million ($783.6 million) from US$377.2 million a year earlier. Revenue rose 11 per cent to US$4.7 billion.
"The world continues to be a Nike-branded place," said McAdams, Wright Ragan analyst Sara Hasan. She also pointed to improved financial performance as gross profit margins expanded to 44.8 per cent from 44.1 per cent a year earlier.
Over the past year, Nike has remained largely resilient to sluggishness in the US footwear market, as seen at Nike's two largest customers, Foot Locker and Finish Line, but Wall Street has wondered if that would last.
Analysts say diversification helps the Beaverton, Oregon-based company weather periods of weak consumer spending because, in addition to pricier, athlete-endorsed shoes, it also sells lower-priced shoes at family-owned chains.
"We still see a pretty strong marketplace out there," said Nike Brand president Charlie Denson, in a conference call with analysts.
Nike shares closed at US$58.32, down US24c, on the New York Stock Exchange, but rose 1.5 per cent in after-hours trade.
