Nike sees strong growth in Asia, Greater China
Sportswear retailer Nike posted $1.55 billion (US$1.1 billion) in net income in the third quarter of fiscal 2019, with its direct-to-consumer approach delivering growth across all four of its geographies.
Revenues increased 7 per cent to $13.5 billion (US$9.6 billion). The Nike brand contributed $9.1 billion of this, while footwear brand Converse brought $651.4 million (US$463 million) – down 2 per cent compared to the prior corresponding period.
“In Q3, our team once again drove strong, healthy growth across Nike’s complete portfolio,” Nike chairman, president and chief executive Mark Parker said.
“Our business momentum is being accelerated by our ability to scale innovation at a faster pace and expand new digital consumer experiences around the world.”
In Asia Pacific, the group saw footwear sales increase 3 per cent to $1.27 billion (US$909 million), while apparel sales grew 6 per cent to $478.3 million (US$340 million).
However, sales in the equipment category fell 8 per cent over the period, to $81.6 million (US$58 million).
Greater China, saw equipment sales stay flat at $40.8 million (US$29 million), but experienced a strong 21 per cent growth in apparel sales to $624.7 million (US$444 million), and footwear sales 19 per cent above the prior period at $1.56 billion (US$1.11 billion).
The group’s gross margin increased over the period to 45.1 per cent, driven by higher selling prices, favourable changes in foreign currency exchange rates and growth in Nike Direct.
Additionally, the group’s effective tax rate was 14.7 per cent, compared to 179.5 per cent during the same period of 2018, which included one-time charges related to the enactment of the U.S. Tax Cuts and Jobs Act, which drove a $1.29 billion (US$921 million) loss during Q3 2018.
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