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Nike reports 8 percent growth in third quarter

Nike Inc. said Thursday that fiscal third-quarter profit grew 8 percent, helped by higher sales in Europe and favorable currency exchange.
/ Source: The Associated Press

Nike Inc. said Thursday that fiscal third-quarter profit grew 8 percent, helped by higher sales in Europe and favorable currency exchange.

The Beaverton-based foot and athletic apparel company said net income for the quarter increased to $350.8 million, or $1.37 per share, versus $325.8 million, or $1.24 per share, during the same period last year.

Analysts polled by Thomson Financial expected net income of $1.33 per share on revenue of $3.93 billion.

Revenue grew 9 percent to $3.93 billion, up from $3.61 billion a year ago. Currency exchange rate changes helped revenue by 3 percent.

But the company said it saw some softness in specialty store mall sales, which are suffering as an industry, and Nike shares fell nearly 3 percent in after-hours trading.

The company saw revenue growth around the globe.

U.S. Nike revenue grew 2 percent to $1.5 billion, European revenue rose 15 percent to $1.1 billion, Asia Pacific revenue increased 11 percent to $589.9 million, and sales from the Americas region improved by 5 percent to $212.5 million. Nike golf led the way with more than 25 percent growth. Nike subsidiaries Converse, Hurley and Exeter grew over 20 percent.

It was the 22nd consecutive quarter of year-over-year revenue growth for the company.

Nike President and Chief Executive Officer Mark Parker said the company continues to grow because it is “innovative, disciplined, and connected to our consumers.”

“We are able to deliver that kind of consistent performance because we create the most innovative and compelling product in the industry,” Parker said.

Nike had a notable quarter for its product lines, including new products surrounding the anniversary of the Air Force 1 sneaker and the introduction of its Tailwind collection, a low-cost shoe from Exeter to be sold exclusively at Payless ShoeSource Inc. stores.

Parker said a “mix of compelling product and premium consumer experiences” drove future orders, which total $6 billion. That’s a 9 percent increase from the same period last year, including a 1 percent gain from currency exchange.

The potential sales include making all Nike running shoes compatible with the Nike+ package, which allows runners to track their workouts with Apple Inc.’s iPod, by year-end.

The company is entering what could be the launch of its “best product lines ever” in the coming year, Nike Brand President Charlie Denson said.

This is Nike’s first earnings report since it outlined an ambitious five-year growth plan in February to reach $23 billion in sales by 2011 and open 100 Nike stores around the country.

“So far so good,” Parker said.

The company announced plans to push several retail partnerships in the coming year that could change the weaker outlook in specialty store mall sales.

Company officials would not disclose details but said changes will take Nike “somewhere new” and change the consumer’s shopping experience wherever they shop.

Nike shares dropped $2.91, or 2.7 percent, to $105.69 in after-hours trading after closing down 25 cents to $108.60 on the New York Stock Exchange.