Nike Profit Climbs 23%

(RTTNews) - Nike Inc. (NKE), the world's largest athletic shoes and apparel maker, said Thursday after the markets closed that its first quarter profit rose 23% from last year, helped by higher revenue, improved gross margin and a lower effective tax rate.

The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue.

"Fiscal 2016 is off to a great start," said Nike President and CEO Mark Parker. "Our relentless pace of growth is driven by our proven strategy of putting the consumer first, obsessing innovation in everything we do and leveraging our powerful portfolio. We're well-positioned to continue to deliver long-term growth that is both sustainable and profitable."

Nike shares are currently gaining 7.23% in after hours trading after closing the day's regular trading session at $114.79, down 64 cents. The shares trade in a 52-week range of $79.27 to $117.72.

For the first quarter ended August 31, 2015, the Beaverton, Oregon-based company reported net income of $1.2 billion or $1.34 per share, compared to $962 million or $1.09 per share for the year-ago quarter.

On average, 27 analysts polled by Thomson Reuters expected the company to earn $1.19 per share for the first quarter.

Gross margin for the quarter improved to 47.5% from 46.6% a year ago, mainly due to higher average selling prices and continued growth in the higher margin Direct to Consumer business.

Revenue for the first quarter rose 5% to $8.41 billion from $7.98 billion last year amid continued strong demand for Nike brands, surpassing the $8.21 billion consensus estimate of 24 analysts. In constant currency, the company's first quarter revenue rose 14%.

As of the end of the first quarter, the company's worldwide futures orders for Nike Brand athletic footwear and apparel scheduled for delivery from September through January rose 9%, or 17% excluding currency changes, from a year ago.

For the first quarter, Nike brand North America revenue rose 8% to $3.8 billion, while Western Europe revenue fell 4% to $1.6 billion and revenue from Central and Eastern Europe grew 2% to $401 million. Greater China revenue surged 30% to $886 million and Japan revenue increased 12% to $179 million. First quarter revenue from emerging markets rose 3% to $966 million.

Footwear revenue for the quarter rose 9% to $5.1 billion, while apparel revenue increased 5% to $2.3 billion.

During the first quarter, Nike repurchased 5.5 million shares of its common stock for about $588 million as part of the four-year, $8.0 billion program approved by the company's Board of Directors in September 2012. As of the end of first quarter, a total of 86.4 million shares had been repurchased under that program for about $6.5 billion.

Nike said in June that co-founder Phil Knight planned to step down as chairman of the company sometime next year. Knight has recommended that CEO Mark Parker succeed him as chairman.