Feb 17, 2017 | By WGSN Insider
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Dec 22, 2014
US athletic apparel producer/retailer Nike shares fell over 3% Friday on the news its all-important futures orders growth slowed to its slowest pace in four quarters, despite reporting stronger than expected Q2 results.
Worldwide futures orders for the December-April period were up 7% year-on-year as of the end of the quarter, and lifted 11% on a currency neutral basis. A year ago, futures orders increased 14%, excluding currency fluctuations. They were also up 11% in Q1.
In Western Europe, futures orders rose 13%, lower than the expected 15%. In emerging markets – which includes Brazil, Mexico and the Asia-Pacific region other than Japan – orders rose just 1%, much lower than the 7% rise analysts expected.
CFO Don Blair said part of the futures orders slowdown was attributable to tough comparisons from last year, when demand surged ahead of the summer’s World Cup. Excluding current comparisons of football (soccer) products, he said, total Nike future orders were in line with those from last quarter.
“As long as we don’t see huge moves in the macroeconomics, we believe that we can continue to generate growth in the business,” Blair said.
But for Q2, the news was all good with profits up 23% to $655m/74 cents per share, ahead of analysts’ 70 cents estimate.
Sales gained 15% year-on-year to $7.38bn, boosted by a big jump in spending on product launches, digital marketing and consumer events.
Sales grew in every region and in every sporting category, excluding golf.
Growth in its core North America region was particularly robust with footwear jumping 18.3% and apparel 14.7% ahead on a year ago.
Gross margins rose to 45.1% for the three months from 43.9% a year ago. Spending increased 11% to $766m.
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