Nike Earnings Increase On Strength In Foreign Markets

December 17, 2008 6:57 p.m. EST

Beaverton, OR (AHN) - Nike Inc. announced Wednesday fiscal second quarter profit rose 9 percent as strong sales in foreign markets and a favorably exchange rate more than offset slumping U.S. sales.

The shoe and apparel maker posted second quarter earnings of $391 million or 80 cents a share, compared to $359.4 million or 71 cents a share in the same period a year ago. The result topped analyst estimates for 78 cents a share, according to Thomson Reuters.

Revenue rose to $4.6 billion, up 6 percent from $4.3 billion last year and was shy of analyst estimates for $4.73 billion.

Nike said favorable currency exchange rates bumped revenue about 1 percent higher. The company saw the most revenue growth in Asia, up 22 percent, while U.S. sales dipped 1 percent in the quarter.

"Our second quarter results demonstrate the power of the Nike brand and the diversity of the Nike, Inc. portfolio," said President and CEO Mark Parker in a press release.

The company reported a slight increase in gross margin to 44.7 percent due to price increases and a better product mix.

Nike said future orders for footwear and apparel scheduled for delivery between December 2008 and April 2009 fell 1 percent to $6.7 billion. However, domestically future orders rose 6 percent.

"I see the current state of our industry and the world as an incredible opportunity for Nike to be a better and stronger leader, and we're going to seize that opportunity," Parker said.

Shares of Nike fell 2.7 percent to $49.23 in afterhours trading.