Home / Knowledge / News / Apparel/Garments / Nike posts strong sales growth in Q1 FY'13

Nike posts strong sales growth in Q1 FY'13

29
Sep '12
Nike Inc. reported financial results for its fiscal 2013 first quarter ended August 31, 2012. Strong demand for Nike, Inc. brands propelled first quarter revenue to new record highs. As expected, diluted earnings per share were lower due to lower gross margin, higher SG&A and an increase in the tax rate.

"We had a strong first quarter and a great start to the fiscal year. Nike, Inc. delivered an amazing array of innovation across some of the biggest moments in sport," said Mark Parker, President and CEO, Nike Inc. “Innovation is how great companies sustain growth and build competitive separation," Parker added. "We’ll continue to make strategic investments across our portfolio of businesses to capture our full potential over the long term and drive shareholder value."

First Quarter Income Statement Review

  • Revenues for Nike Inc. increased 10 percent to $ 6.7 billion, up 15 percent on a currency-neutral basis. Excluding the impacts of changes in foreign currency, Nike Brand revenues rose 16 percent, with growth in all key categories and every geography except Japan.  Revenues on a currency-neutral basis for Other Businesses increased 9 percent, while Businesses to be Divested grew by 6 percent.
  • Gross margin declined 80 basis points to 43.5 percent. Gross margin continued to benefit from pricing actions and product cost reduction initiatives, however, this was more than offset by higher input costs, primarily materials and labor. In addition, gross margin was negatively impacted by a shift in the Company’s mix to lower margin businesses within the Nike Brand and the conversion of the China market to direct distribution for Converse.
  • Selling and administrative expenses grew at a faster rate than revenue, up 18 percent to $2.2 billion. Demand creation expenses increased 29 percent to $891 million due to marketing support for key product initiatives, as well as support for the Olympics and European Football Championships. Operating overhead expenses increased 12 percent to $1.3 billion due to additional investments made in the wholesale business to support growth initiatives and higher Direct to Consumer costs from the addition of new stores over the last year.
  • Other income, net was $29 million, comprised primarily of foreign exchange related gains. For the quarter, the Company estimates the year-over-year change in foreign currency related gains and losses included in other income, net, combined with the impact of changes in foreign currency exchange rates on the translation of foreign currency-denominated profits, decreased pretax income by approximately $28 million.
  • The effective tax rate was 27.5 percent compared to 24.3 percent for the same period last year.  The effective tax rate was higher due to a larger percentage ofearnings coming from higher tax countries, primarily the United States, as well as a higher effective tax rate on operations abroad.
  • Net income decreased 12 percent to $567 million while diluted earnings per share decreased 10 percent to $1.23, reflecting a 3 percent decline in the weighted average diluted common shares outstanding. In a press release issued on May 31, 2012, the Company announced its intention to divest of the Cole Haan and Umbro businesses. Pro Forma diluted earnings per share, excluding the results of the Businesses to be Divested, would have been approximately $1.27, down 9 percent compared to the first quarter of fiscal 2012 on a comparable basis.


Must ReadView All

Pic: BRC

Retail | On 4th Jul 2020

UK retailers collaborate to combat climate change

Twenty UK retailers have signed a declaration to develop a road map...

Pic: Thika Cloths Mills

Apparel/Garments | On 4th Jul 2020

Hope for Kenyan fabric manufacturer after govt order

Kenya's Thika Cloths Mills that was on the brink of closure following ...

Pic: Canopyplanet

Apparel/Garments | On 4th Jul 2020

Amazon is part of CanopyStyle initiative

Amazon, the largest online retailer, has joined CanopyStyle...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Opportunity now to reimagine processes & systems in a digital environment

Sanjay Yagnik, Maa Tex Speciality

Sanjay Yagnik
Maa Tex Speciality

‘We suggest reducing dosage of sizing chemicals to reduce sludge...

Jim Desai, Blaiva Fabricaa

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

Laksheeta Govil,

Laksheeta Govil

Founded in 2014, Fizzy Goblet is a Delhi / NCR based handcrafted leather...

Aaron Spivak,

Aaron Spivak

Canada-based Hush Blankets was founded by Lior Ohayon and Aaron Spivak to...

Sugandha Bhardwaj,

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Hemant Bheda, Arevo

Hemant Bheda
Arevo

Arevo, based in Silicon Valley in California, develops technology to...

Ayyappa Nagubandi, Broadcast Wearables Pvt Ltd

Ayyappa Nagubandi
Broadcast Wearables Pvt Ltd

Hyderabad-based Broadcast Wearables has come up with the country's first...

Daniel Kaye, RocketLife

Daniel Kaye
RocketLife

<div>RocketLife, an award-winning developer of breakthrough visual...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Varsha Wadhwa, VW

Varsha Wadhwa
VW

Coming from a family that ran a business of jute and linen mills since...

Seema Agrawal, Artisan Saga

Seema Agrawal
Artisan Saga

Artisan Saga, founded by Kaushik Rajani and Seema Agrawal, is an online...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


July 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search