Nike's Q3 profit up 19% |
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Wed, 22 Mar 2006 10:45
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LOS ANGELES: High-end shoe and apparel maker Nike Inc. had its quarterly profit up 19 per cent, beating Wall Street estimates. The company posted a net income of $325.8 million for the quarter ended 28 February 2006 against $273.4 million a year ago. Its revenues for the quarter rose 9 per cent to $3.61 billion.
The company said strong demand for footwear and apparel in the U.S. and emerging markets helped it to offset a rather weak demand in Europe and Japan. It also said its gross margins were affected by higher fuel costs.
Sales went up in the U.S. by 14 per cent to $1.44 billion, in Asia-Pacific by 13 per cent to $532.3 million, while the Americas saw a huge 41 per cent increase to $203.1 million. However, Europe, Middle East and Africa saw a decline by 5 per cent to $980.1 million.
This is the first set of results for the company under the new chief executive Mark Parker, who replaced William Perez, who was asked to go in January over his differences with company founder and chairman Philip Knight.
The company expects to have a 5 per cent to 7 per cent growth in sales in the fourth quarter compared with a year-ago period. The company does not provide profit forecasts. The company intends to increase its marketing spend at sports events, including the World Cup soccer, which it hopes, will bring in results.
Nike hopes to have sales growth for the full year in high single digits. Gross margins are expected to be flat to down for 2007 from fiscal 2006.
The company's shares fell to $84.20 on the Inet electronic exchange. In New York Stock Exchange, it closed 56 cents down at $84.95.
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Nike replaces Perez with Parker as CEO 