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NIKE jumps on all fields

Staff writer |
NIKE, Inc. reported financial results for its fiscal 2014 second quarter ended November 30, 2013. Earnings per share for the quarter were up 4 percent and revenues increased 8 percent to $6.4 billion, up 9 percent on a currency neutral basis.

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Revenues for the NIKE Brand were $6.1 billion, up 9 percent on a currency neutral basis, with growth in every product type, geography and key category. Revenues for Converse were $360 million, up 11 percent on a currency neutral basis, driven by strong performance in company's largest owned markets: North America, the United Kingdom, and China.

Gross margin increased 140 basis points to 43.9 percent. Gross margin benefitted from a shift in the mix of the Company’s revenues to higher margin products and businesses, higher average prices, easing raw materials product input costs and continued strength in the higher margin Direct-to-Consumer business. These benefits were partially offset by unfavorable changes in foreign exchange rates and higher labor product input costs.

Selling and administrative expense grew 14 percent to $2.1 billion. Demand creation expense was $691 million, up 13 percent versus relatively low levels in the prior year, driven by marketing support for key product launches, consumer running events and upcoming global sporting events, including the World Cup and Winter Olympics.

Operating overhead expense increased 14 percent to $1.4 billion due to investments in digital innovation and other growth businesses, as well as higher Direct to Consumer costs driven by growth and new store openings.

November 30, 2013 inventories for NIKE, Inc. were $3.7 billion, up 11 percent from November 30, 2012. NIKE Brand wholesale unit inventories increased 7 percent to support future demand. Changes in foreign currency exchange rates and product cost drove an approximate 4 percentage point net increase in NIKE, Inc. inventory growth.

Cash and short-term investments were $5.2 billion, $1.7 billion higher than last year as a result of proceeds from the issuance of debt and sale of the Umbro and Cole Haan businesses in the prior fiscal year, as well as higher net income.

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