European demand, higher prices drive Nike's profit beat

NEW YORK: Nike Inc, the world's largest sportswear maker, reported better-than-expected quarterly profit as strong demand for its products helped the company raise prices and revenue from Europe jumped 25 percent.

The company, whose shares rose 5.5 percent in extended trading, said gross margin improved to 46.6 percent in the first quarter from 44.9 percent a year earlier.

The company has been giving tough competition to Germany's Adidas AG on the hotly contested European turf.

The soccer World Cup, hosted by Brazil in June-July, was the first time that Nike sponsored more national teams than Adidas.

Nike, known for its distinctive 'swoosh' or tick logo, gets more than half of its revenue from North America and Western Europe.

Revenue from North America rose 12 percent in the quarter ended Aug. 31, while revenue from Western Europe jumped 25 percent, excluding the impact of currency fluctuations.

Revenue from emerging markets rose 10 percent in the quarter.

Orders for Nike-branded shoes and clothing scheduled for delivery between September and January rose 14 percent globally in the first quarter, excluding the impact of currency fluctuations.

Net income rose to $962 million, or $1.09 per share, in the first quarter from $779 million, or 86 cents per share, a year earlier.

The rise in net income was also helped by lower tax rate.

Revenue jumped to $7.98 billion from $6.97 billion.

Analysts on average had expected earnings of 88 cents per share, on revenue of $7.83 billion, according to Thomson Reuters I/B/E/S.

Shares of the company have gained more than 15 percent in one year to Thursday's close of $79.75 on the New York Stock Exchange on Thursday.- Reuters