- FashionUnited |
Nike, the world's largest maker of sports clothing and shoes, has reported better-than-expected profits. Net profit rose 8% to $350.8m (£178m) in the three months to 28 February, compared with $325.8m a year earlier. Sales rose 9% to $3.93bn in the period. However, Nike also said that US sales and margins were under pressure, while demand in the market including the UK, France and Japan dipped in the quarter. Nike has suffered as many consumers have reined in spending, analysts said.
Two of Nike's main customers in the US, Foot Locker and Finish Line, have experienced a difficult retail environment. "It's no secret that mall-based athletic specialty guys have had a pretty tough year," said Charlie Denson, Nike's brand president. Analysts said that Nike gets about a fifth of its total sales from the two retailers. "The US is a concern," said Sara Hasan, an analyst at McAdams, Wright, Ragen. "That hit people out of left field."
While some of the company's key export markets came under pressure, with Japanese sales down 3%, others performed well, helped in large part by the weakness of the US dollar. A weaker dollar boosts the value of Nike's foreign sales when currencies such as the euro are converted back into the US currency. During the quarter, European sales climbed 15%, while in Asia Pacific they increased by 11%. The company's top brands such as Converse also performed well. Even so, the concerns dented the company's share price, and the stock dipped about 3% in electronic after-hours trading in New York, signalling that they would fall when markets opened later on Friday.