GAAP gross margin was 36.8 per cent in the first quarter of fiscal 2019, compared to 37.6 per cent in the first quarter of fiscal 2018, driven by changes in product mix and the change in the accounting standard for revenue recognition which shifts licensing revenues to the fourth quarter rather than spreading revenues evenly throughout the year. Adjusted gross margin was 36.8 per cent compared with adjusted gross margin of 37.6 per cent in the first quarter of fiscal 2018.
Under GAAP, for the first quarter of fiscal 2019, net income was
The company's financial position continues to be very strong. Cash and investments at the end of the first quarter of fiscal 2019 totaled $55 million. The company’s net debt to total capitalisation stood at 18.9 per cent at the end of the first quarter of fiscal 2019 as compared to 24.3 per cent at the end of the first quarter of fiscal 2018. Working capital management continues to be a critical focus across the organization as inventory turned at approximately 3.8 for the first quarter of fiscal 2019.
"We are very pleased with our start to fiscal 2019, which continued our momentum from last year. During the quarter, our innovative products and high impact marketing led to stronger than expected shipments, especially in Nike Swim and across our golf brands. We ended the quarter with a strong balance sheet, which enabled us to retire $50 million of outstanding notes. We remain optimistic about our business prospects as we enter the second quarter, and we conservatively plan to hold the full year guidance," Oscar Feldenkreis, chief executive officer and president, said.
For fiscal 2019, the company currently expects total revenue to be in the range of $855 million to $865 million, which compares to 'core business' sales of $844 million in fiscal 2018. This revenue range includes a $5 million increase due to the reclassification in license advertising contributions from SG&A due to the new accounting revenue recognition rules. (RR)
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