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Last Update: 22-Mar-13 07:51 ET
Nike shares rise 8% following beat on earnings
Nike (NKE $57.97 +4.37) reported third quarter earnings of $0.73 per share, $0.06 better than the Capital IQ consensus of $0.67, while revenues rose 9.4% year/year to $6.19 billion versus the $6.22 billion consensus, up 10 percent on a currency-neutral basis. Excluding the impact of changes in foreign currency, NIKE Brand revenues rose 10 percent, with growth in all geographies except Greater China and Japan and in all key categories except Sportswear and Action Sports. Revenues for Other Businesses increased 9 percent as growth at Converse and NIKE Golf more than offset lower revenues at Hurley. Gross margin increased 30 basis points to 44.2 percent. Gross margin benefitted from the combination of pricing actions and easing material costs, which more than offset higher labor costs. This benefit was partially offset by higher discounts, particularly in Greater China as the Company continues work to manage marketplace inventory. Additionally gross margin was impacted by unfavorable changes in foreign exchange rates and a shift in the mix of the Company's revenues to lower margin geographies. Inventories for NIKE, Inc. were $3.3 billion, up 4 percent from February 29, 2012. NIKE Brand inventories increased 4 percent. NIKE Brand wholesale unit inventories increased 7 percent to support future demand, while the impact of changes in foreign currency exchange rates and changes in product cost drove a 3 percentage point decline in NIKE Brand inventory growth. During Q3, NIKE repurchased a total of 4.9 million shares for ~$253 million as part of the four-year, $8 billion program approved by the Board of Directors in September 2012. As of the end of the quarter, worldwide futures orders for NIKE Brand athletic footwear and apparel, scheduled for delivery from March through July 2013 totaled $9.9 billion, 6 percent higher than orders reported for the same period last year. Ex-FX, reported orders would have increased 7 percent.
