Nike buoyed by strong domestic demand; shares jump
By Nivedita Bhattacharjee
(Reuters) - Nike Inc (NKE.N: Quote) reported forecast-topping quarterly profit on Thursday on strong North American demand, and its orders volume indicated steady worldwide demand. Its shares were up 6 percent after the bell.
Orders for Nike-branded shoes and clothing scheduled for delivery from December 2012 through April 2013, known as futures orders, were up 14 percent in North America, Nike's most mature market.
"In North America, we created great momentum. This is somewhat counterintuitive to some, given this market size and assumed maturity. But I see tremendous growth potential in North America," Chief Executive Mark Parker said on a call with analysts.
Worldwide orders for the Beaverton, Oregon-based company were up 6 percent, the same as last quarter.
"The biggest driver of this stock is usually futures orders. Last quarter, futures orders were lower than expected. This quarter they came in line, and North America was stronger than expected," said Brian Yarbrough, consumer discretionary analyst for Edward Jones.
Yarbrough also said the company's gross margins for the quarter, though still down, exceeded expectations.
"If you go back a few quarters, gross margins have been down a lot more. The less of a decline is positive," he said.
Nike's gross margins fell 30 basis points at the end of its fiscal second quarter. Continued...