Kicking ahead: Price rises and cost falls keep Nike onside
Friday 28 June 2013
Nike’s decision to increase prices, coupled with falls in materials costs, helped the sports clothing giant to boost profits by a quarter in the last three months.
Europe remains tough with flat sales, and China saw a surprising fall of 1% but North America saved the day as revenues in its home market surged 12%.
Sales of football-related merchandise fell against tough comparisons a year ago in the run-up to the Euro 2012 football tournament, but running gear and basketball goods grew strongly.
Nike has also been helped by other associated lines, including shoe company Converse, surfing clothing brand Hurley and Nike Golf, which collectively brought in $2.5 billion (£1.6 billion).
Group like-for-like sales rose 9% to $6.7 billion, with profits up 25% at $696 million. The Chinese market is closely watched because it represents 11% of Nike’s sales but 22% of profits. Sales have been tough because of price-cutting by competitors.
Nike chief executive Mark Parker said the company needed “discipline and patience” in China. Gross profit margin improved 1.1% to 43.9% of sales, jumping for the second quarter in a row after two years of falls.
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