WASHINGTON COUNTY (dpa-AFX) - Nike Inc. (NKE), the world's largest maker of athletic shoes and apparel, said Thursday after the markets closed that its second quarter profit fell 18% from last year, hurt mainly by the loss recorded for the sale of the Umbro brand.
However, the company's quarterly earnings per share from continuing operations rose from last year and came in above analysts' expectations.
Worldwide futures orders for Nike Brand athletic footwear and apparel, scheduled for delivery from December 2012 through April 2013, rose 6% from last year to $9.3 billion. Future orders rose 14% in North America, but fell 6% in Greater China.
Nike shares are currently gaining 5.31% in after hours trading after closing the day's regular trading session at $99.00, up $1.22 or 1.25%. The shares trade in a 52-week range of $85.10 to $114.81.
The company has managed to increase sales in North America, its largest market, even as sales have slowed down or even declined in its overseas markets.
Second quarter revenue from North America, the company's largest market, surged 17% year-over-year to $2.4 billion, while revenue for Western Europe fell 2% to $897 million and Central and Eastern Europe revenue grew 2% to $266 million.
Revenue for Greater China dropped 11% to $577 million in the second quarter, while Japan revenue rose 11% to $219 million. Second quarter revenue from emerging markets climbed 11% to $1.05 billion.
Revenue from the company's other businesses, which includes Converse Inc., Hurley International LLC and Nke Golf, increased 6% to $518 million in the second quarter.
Gross margins for the quarter narrowed to 42.5% from 42.8% a year ago, due mainly to higher labor costs and unfavorable changes in foreign exchange rates as well as a shift in the mix of the company's revenues to lower margin products and businesses.
For the second quarter ended November 30, 2012, the Beaverton, Oregon-based company reported net income of $384 million, compared to $469 million for the year-ago quarter.
The latest quarter results include a net loss from discontinuing operations of $137 million, which includes the loss recorded for the sale of the Umbro brand of $107 million, net of tax, that consummated on November 30. On November 16, Nike said it has agreed to sell Cole Haan to Apax Partners for $570 million. The company said May that it planned to divest its Cole Haan and Umbro businesses to sharpen its focus on driving growth in the Nike, Jordan, Converse and Hurley brands.
Income from continuing operations for the second quarter was $521 million or $1.14 per share, compared to $480 million or $1.03 per share in the prior year quarter.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $1.00 per share for the second quarter. Analysts' estimates typically exclude special items.
Revenues for the second quarter rose 7% to $5.96 billion from $5.55 billion in the same quarter last year. Excluding changes in currency exchange rates, second quarter revenues grew 10% from a year earlier. Fifteen analysts had a consensus revenue estimate of $5.99 billion for the second quarter.
For the second quarter, footwear sales rose 7% to $3.3 billion, while apparel sales increased 7% to $1.8 billion and equipment sales grew 24% to $332 million.
During the second quarter, Nike repurchased 4.0 million shares for about $384 million and concluded its previous four-year, $5 billion share repurchase program approved by the Board of Directors in September 2008.
Following the completion of the previous program, the company began repurchases under the four-year, $8 billion program approved in September this year. Of the total shares repurchased during the second quarter, 3.1 million shares were purchased under the new program for about $294 million.
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