Nike Inc has reported financial results for its fiscal 2012 first quarter ended 31 August 2011. Revenues increased 18% to US$6.1 billion, up 11% on a currency-neutral basis. Excluding the impacts of changes in foreign currency, Nike Brand revenues rose 12% with growth in every geography except Western Europe.
Europe was flat due to the negative impact from changes in the timing of shipments, and comparisons to last year’s strong World Cup related sales.
The company noted that diluted earnings per share and revenue ‘represented new records, as strong demand for Nike Inc brands, SG&A expense leverage, tax efficiencies and a lower average share count offset the impact of a lower gross margin.’
“We’re off to a strong start in fiscal year 2012. We have a powerful and diverse portfolio of brands and businesses, and we’re focused on leveraging them to drive growth and create value for our shareholders,” said Mark Parker, President and CEO of Nike Inc.
“It pays to be prudent in times like these. It’s also essential that we remain on the offense, creating opportunities. We do that by connecting with consumers, designing innovative products and delivering amazing experiences. That’s how we continue to lead this company and the industry into the future.”
Inventories
Inventories for the company were US$3.1 billion, up 41% from 31 August 2010. According to Nike, inventories were higher compared to a year ago due to higher average unit product costs, growth in total units and changes in currency exchange rates.
Nike Brand unit inventories were higher ‘as a result of strong demand and elevated product deliveries as manufacturing partners have expanded production capacity to more closely align with demand.’ Also contributing to the growth in Nike Brand units were strategic pre-builds for key seasonal items with longer production lead times and growth in the company’s Direct to Consumer business. Relative to revenues and futures, current unit inventories are broadly consistent with the levels reported prior to the 2009-2010 economic downturn.
Futures Orders
As of the end of the quarter, worldwide futures orders for Nike Brand athletic footwear and apparel, scheduled for delivery from September 2011 through to January 2012, totalled US$8.5 billion, 16% higher than orders reported for the same period last year. Excluding currency changes, reported orders would have increased 13%.
