PORTLAND — Nike sales were up 5 percent, profit exceeded expectations and other key areas also showed improvement in the first quarter compared to last, the Oregon sports apparel company reported Thursday.
“Fiscal 2016 is off to a great start,” chief executive Mark Parker said in a news release. “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.”
Other highlights from Nike’s report on the quarter ending Aug. 31:
Revenues increased to $8.4 billion, up 14 percent on a currency-neutral basis. (Analysts had anticipated sales of $8.2 billion.) Nike Brand sales were $7.9 billion, up 15 percent on a currency-neutral basis and driven by growth in every geography and nearly every key category; revenues for Converse were $555 million, up 3 percent on a currency-neutral basis, mainly driven by strong growth in the United States, partially offset by a decline in the United Kingdom.
Selling and administrative expense increased 4 percent to $2.6 billion. Demand creation expense was $832 million, down 7 percent, reflecting World Cup spending last year. Overhead expense increased 10 percent to $1.7 billion, reflecting continued growth in the DTC business and targeted investments in infrastructure and consumer-focused digital capabilities.
Profit increased 23 percent to $1.2 billion while diluted earnings per share increased 23 percent to $1.34, reflecting strong revenue growth, gross margin expansion, selling and administrative expense leverage, a lower tax rate and a decrease in the weighted average diluted common shares outstanding.
Inventories were $4.4 billion, up 10 percent, driven primarily by an 8 percent increase in Nike Brand wholesale unit inventories.
Futures orders for footwear and apparel scheduled for delivery from September 2015 through January 2016 were 9 percent higher than orders reported for the same period last year, and 17 percent higher on a currency-neutral basis.
Geographic revenues, excluding currency changes, increased in China, up 30 percent; North America, up 8 percent; Western Europe, up 14 percent; Central and East Europe, up 26 percent; China, up 30 percent; Japan up 35 percent; Emerging markets up 19 percent.
