Nike announces Q4 profit up 14%
US athletic apparel and footwear firm Nike announced on 27 June 2011 that its fourth quarter profit rose 14% from last year, as higher sales and better expense management helped offset lower gross margins.
The company reported net income for the fourth quarter of $594 million compared to $522 million for the year-ago quarter.
Gross margins for the quarter fell to 44.3% from 47.4% a year ago, mainly as a result of higher product costs, elevated freight costs and a lower mix of license revenue due in part to the conversion of certain markets to direct distribution of the Converse and Umbro Brands.
Revenues for the fourth quarter increased 14% to $5.8 billion from $5.1 billion in the same quarter last year. Excluding changes in currency exchange rates, fourth quarter revenues grew 11% from a year earlier.
For the fourth quarter, footwear sales rose 19% to $3.3 billion, while apparel sales increased 8% to $1.4 billion and equipment sales grew 5% to $271 million.
Fourth quarter North America revenues increased 22% year-over-year to $2.1 billion, while revenue for Western Europe rose 5% to $1 billion and Central and Eastern Europe revenue grew 1% to $294 million.
Revenue for Greater China increased 21% to $564 million in the fourth quarter, while Japan revenue fell 17% to $216 million. Fourth quarter revenue from emerging markets jumped 25% to $747 million from $597 million a year ago.
Revenue from the company’s other businesses, which include Cole Haan, Converse, Hurley International, Nke Golf, and Umbro, increased 6% to $760 million in the fourth quarter.
Worldwide future orders for Nike brand athletic footwear and apparel, scheduled for delivery from June to November, rose 15% from last year to $10.3 billion.
By region, futures orders for the North America region were up 14%; Western Europe rose 11%, Central and Eastern Europe increased 13%, Greater China jumped 24%, Japan down 13% and emerging markets futures orders surged 25%. At the end of the fourth quarter, global inventories stood at $2.7 billion, up 33% from low levels a year ago.
“In fiscal year 2011, we delivered exceptional results in extraordinary times,” said Mark Parker, Nike president and CEO. “Our business is organised to drive growth across multiple brands, geographies and categories, as we manage through the ever-changing macroeconomic landscape.”
