Nike’s profit jumps more than 30 percent

/ Source: The Associated Press

Nike Inc.’s third-quarter profit jumped more than 30 percent because of strong sales overseas and a weak dollar, the athletic shoe and apparel company said Wednesday.

Nike said its net income grew to $463.8 million, or 92 cents per share, up from $350.8 million, or 68 cents per share, in the same period a year earlier.

Revenue for the quarter, which ended Feb. 29, grew 16 percent to $4.54 billion, up from $3.93 billion a year earlier. Changes in currency exchange rates accounted for 6 percentage points of revenue growth for the quarter.

The results exceeded Wall Street’s projections. Analysts surveyed by Thomson Financial had expected the Beaverton, Ore.-based company to earn 81 cents per share on revenue of $4.36 billion.

Nike President Mark Parker said the results are a “clear indication that our strategy is working and that we’re on track to achieve our financial goals for this fiscal year and beyond.”

Revenue grew 20 percent or more in overseas markets, with particular strength in Asia and Europe. Company officials said Nike has already hit its goal of more than $1 billion in annual sales in China.

By comparison, U.S. revenue increased 5 percent, with gains in shoe and apparel goods but a drop in equipment sales.

Still, analysts said the U.S. performance was solid in light of weak consumer spending amid a struggling economy. And the overseas sales were strong, even given the weak dollar, said Sara Hasan, an analyst at McAdams Wright and Ragen.

“We all know that financial markets are in flux,” Parker said. “That makes having a strong brand, a diverse portfolio and solid growth strategy to drive cash flow especially valuable.”

Nike has made several changes to its subsidiary lineup, which brought in 15 percent more revenue for the quarter at $600.9 million.

The $29 million sale of Nike’s Starter brand to Iconic Brand Group Inc. is included the quarter’s income. Other recent deals, such as its acquisition of British soccer company Umbro PLC and the sale of its Bauer Hockey unit, are not reflected.

The company saw its future orders, for products to be delivered from March through July grow, up 11 percent for the quarter.

Expected marketing expenses for major sporting events, such as the Beijing Olympics and the European Championships, will be reflected in the fourth quarter.

“I believe there is tremendous opportunity in our industry,” Parker said. “It is important to look through cyclical pressures and focus on the long-standing powers in place. The price of oil is not as powerful as the global passion for sports. This is true for Nike and the industry.”